Tariff Order 2023-24

TRIPURA ELECTRICITY REGULATORY COMMISSION
TARIFF ORDER FOR FY 2023-24
Petition No. 3 (Truing up) of 2023 and 4 (MYT) of 2023
True-up of FY 2020-21 and FY 2021-22, Annual Performance Review of FY

2022-23 and ARR Determination for Generation, Transmission and
Distribution Business for FY 2023-24 and Retail Supply Tariff for FY 2023-24
of Tripura State Electricity Corporation Limited
September, 2023
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Table of Contents
1 BACKGROUND AND SALIENT FEATURES OF THE ORDER ........................................... 16
1.1 BACKGROUND ........................................................................................................... 16

1.2 TARIFF ORDERS ISSUED BY THE COMMISSION EARLIER: ..................................................... 17
1.3 ADMISSION OF CURRENT PETITION FILED BY TSECL ........................................................ 18
1.4 PUBLIC CONSULTATION PROCESS ................................................................................. 20
1.5 STATE ADVISORY COMMITTEE ...................................................................................... 21
1.6 CONTENT OF THE ORDER ............................................................................................ 21
2 SUGGESTIONS/OBJECTIONS, TSECL’S RESPONSES AND COMMISSION’S RULING ..... 23
2.1 OBJECTION: DISCOUNT TO COMMERCIAL TARIFF TO BE GIVEN FOR HOSPITALS ....................... 23

2.2 OBJECTION: ARR PETITION FOR FY 2023-24 ................................................................. 25
2.3 OBJECTION: ALLOWANCE OF HIGHER RETURN ON EQUITY BY SEPARATION OF TSECL ............. 25
2.4 OBJECTION: PERFORMANCE PARAMETERS FOR RGTPP AND BGTPP .................................. 26
2.5 OBJECTION: RATE OF INTEREST ON LOAN CAPITAL AND W ORKING CAPITAL ............................ 27
2.6 OBJECTION: INCREASE IN GAS PRICES ........................................................................... 28
2.7 OBJECTION: DEPRECIATION ......................................................................................... 29
2.8 OBJECTION: TARIFF FOR INDUSTRY CATEGORY (NEW ) ...................................................... 29
2.9 OBJECTION: INCREASE IN ELECTRICITY BILL UNIT PRICE .................................................... 31
2.10 OBJECTION: UDAY SCHEME DETAILS AND DISTRIBUTION LOSS .......................................... 32
3 TRUING UP OF ARR FOR FY 2020-21 AND FY 2021-22, APR OF FY 2022-23AND ARR OF

FY 2023-24FOR GENERATION BUSINESS ............................................................................ 34
3.1 BACKGROUND AND APPROACH ..................................................................................... 34

3.2 NORMS FOR OPERATIONS ........................................................................................... 35
3.3 GROSS GENERATION AND NET GENERATION ................................................................... 35
3.4 PLANT AVAILABILITY FACTOR ....................................................................................... 39
3.5 STATION HEAT RATE .................................................................................................. 41
3.6 FUEL PURCHASE COST ............................................................................................... 43
3.7 ANNUAL FIXED CHARGES (AFC) .................................................................................... 48
3.8 OPERATION & MAINTENANCE EXPENSES ........................................................................ 48
3.9 DEPRECIATION .......................................................................................................... 53
3.10 INTEREST ON W ORKING CAPITAL .................................................................................. 57
3.11 RETURN ON EQUITY AND TAX ON INCOME ....................................................................... 60
3.12 NON-TARIFF INCOME .................................................................................................. 63
3.13 SHARING OF GAINS AND LOSSES ON CONTROLLABLE PARAMETERS ..................................... 64
3.14 SUMMARY OF TRUE-UP FOR FY 2020-21 AND FY 2021-22AND ARR FOR FY 2022-23 TO FY
2023-24 ............................................................................................................................ 65
3.15 GENERATION TARIFF FOR FY 2023-24 .......................................................................... 70
4 TRUING UP OF ARR FOR FY 2020-21 AND FY 2021-22, APR OF FY 2022-23 AND ARR OF
Tariff Order for TSECL for FY2023-24 Page 2 of 151

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FY 2023-24 FOR TRANSMISSION BUSINESS ........................................................................ 71

4.2 TRANSMISSION LOSS.................................................................................................. 72
4.3 ANNUAL FIXED COST (AFC) ........................................................................................ 73
4.5 DEPRECIATION .......................................................................................................... 75
4.6 INTEREST AND FINANCE CHARGES ................................................................................ 78
4.7 RETURN ON EQUITY AND TAX ON RETURN ON EQUITY ....................................................... 78
4.8 INTEREST ON W ORKING CAPITAL .................................................................................. 80
4.9 NON-TARIFF INCOME .................................................................................................. 82
4.10 SUMMARY OF TRUE-UP FOR FY 2020-21 AND FY 2021-22 AND ARR FOR FY 2022-23 AND FY
2023-24 FOR TRANSMISSION BUSINESS ................................................................................... 83
5 TRUING UP OF ARR FOR FY 2020-21 AND FY 2021-22, APR OF FY 2022-23 AND ARR OF
FY 2023-24FOR DISTRIBUTION BUSINESS ........................................................................... 85

5.2 ENERGY SALES ......................................................................................................... 86
5.3 DISTRIBUTION LOSS ................................................................................................... 89
5.4 ENERGY BALANCE ..................................................................................................... 91
5.5 POWER PURCHASE .................................................................................................... 94
5.6 INTRA-STATE TRANSMISSION CHARGES ......................................................................... 97
5.8 DEPRECIATION ........................................................................................................ 100
5.9 INTEREST AND FINANCE CHARGES .............................................................................. 103
5.10 INTEREST ON W ORKING CAPITAL ................................................................................ 105
5.11 RETURN ON EQUITY AND TAX ON RETURN ON EQUITY ..................................................... 106
5.12 NON-TARIFF INCOME ................................................................................................ 109
5.13 SHARING OF CONTROLLABLE FACTOR .......................................................................... 110
5.14 SUMMARY OF ARR FOR FY 2020-21 TO FY 2023-24 ..................................................... 112
5.15 REVENUE FROM SALE OF POWER ............................................................................... 115
5.16 REVENUE GAP/(SURPLUS) ......................................................................................... 116
6 DIRECTIVES OF THE COMMISSION............................................................................. 119
7 TARIFF PRINCIPLES AND DESIGN .............................................................................. 120
7.1 TARIFF PROPOSAL FOR FY 2023-24 ........................................................................... 120

7.2 W HEELING CHARGES ............................................................................................... 121
7.3 CROSS SUBSIDY ..................................................................................................... 123
7.4 CROSS-SUBSIDY SURCHARGE .................................................................................... 124
7.5 TARIFF PRINCIPLES .................................................................................................. 128
7.6 APPROVED TARIFF FOR FY 2023-24 ........................................................................... 133
7.7 APPROVED MISCELLANEOUS AND OTHER CHARGES FOR FY 2023-24 ................................ 141
8 ANNEXURE 1: APPROVED TARIFF SCHEDULE FOR FY 2023-24 .................................. 145

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9 ANNEXURE 2: TARIFF SCHEDULE FOR FY 2023-24 AFTER CONSIDERING GOVERNMENT

SUBSIDY ........................................................................................................................... 147
10 APPENDIX 1: NUMBER OF CONSUMERS FROM FY 2020-21 TO FY 2023-24(P) ............. 149
11 APPENDIX 2: CONNECTED LOAD FROM FY 2020-21 TO FY 2023-24(P) ........................ 150
12 APPENDIX 3: SALES (MU) FROM FY 2020-21 TO FY 2023-24(P) ................................... 151

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List of Tables
Table 1: Name of the Objectors who filed objections/suggestions in writing on Tariff
Petition of TSECL ............................................................................................................. 20
Table 2: Plant wise Effective Capacity ........................................................................... 35
Table 3: Plant-wise own generation for FY 2020-21 to FY 2023-24 as submitted by
TSECL ............................................................................................................................... 37
Table 4: Normative PLF and Aux. Consumption and Actual Performance of
Generation Plant (%)........................................................................................................ 38
Table 5: Own generation from FY 2020-21 to FY 2023-24approved by the
Commission ...................................................................................................................... 39
Table 6: Plant wise Availability (%) for FY 2020-21 to FY 2023-24 submitted by
TSECL ............................................................................................................................... 40
Table 7: Plant wise Availability (%) for FY 2020-21 to FY 2023-24approved by the
Commission ...................................................................................................................... 41
Table 8: SHR for FY 2020-21 to FY 2023-24(kCal/ kWh) ............................................ 42
Table 9: Approved SHR (kCal/kWh) ............................................................................... 42
Table 10: Source wise Supply of Fuel and cost (per SCM) - FY 2020-21 to FY 2023-
24 ....................................................................................................................................... 43
Table 11: Details of APM Gas price notified by MoPNG, GoI ...................................... 44
Table 12: Fuel consumption and Fuel Cost as per TSECL (Rs. Crore) ...................... 45
Table 13: Reconciliation of Fuel Cost (Rs. Crore)......................................................... 45
Table 14:Fuel Purchase Cost of RGTPP for FY 2020-21 to FY 2022-23 as approved
by the Commission ........................................................................................................... 47
Table 15: Fuel Purchase Cost of BGTPP for FY 2020-21 and FY 2022-23approved
by the Commission ........................................................................................................... 47
Table 16: Fuel Cost for FY 2020-21 to FY 2023-24approved by the Commission .... 48
Table 17: Norms for calculation of O&M expenses for Generating Station ................ 48
Table 18: O&M Expenses claimed by Petitioner (Rs. Crore) ....................................... 49
Table 19: Normative O&M Cost for FY 2020-21 and FY 2023-24approved by the
Commission (Rs. Crore) .................................................................................................. 51
Table 20: Reconciliation of O&M function-wise with Audited Accounts (Rs. Crore) .. 52
Table 21: O&M expenses for FY 2020-21 to FY 2023-24 as approved by the
Table 22: Rate of Depreciation as per Tariff Regulations ............................................ 53
Table 23: Gross Value of Assets and Depreciation claimed for FY 2020-21 to FY
2023-24(Rs. Crore) .......................................................................................................... 54
Table 24: Capitalisation of Assets of Generation business – Petitioner (Rs. Crore) . 55
Table 25: Depreciation for FY 2020-21 to FY 2023-24approved by the Commission

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(Rs. Crore) ........................................................................................................................ 56

Table 26: Interest on working Capital for FY 2020-21 to FY 2023-24, submitted by
TSECL (Rs. Crore) ........................................................................................................... 57
Table 27: Computation of rate of Interest on Working Capital ..................................... 59
Table 28: Interest on Working Capital for FY 2020-21 to FY 2023-24, approved by
the Commission (Rs. Crore) ............................................................................................ 59
Table 29: Calculation of Equity Fund and Return on Equity as claimed by the
Petitioner (Rs. Crore) ....................................................................................................... 61
Table 30: Equity Base for Generating Station for FY 2020-21 to FY 2023-24approved
by the Commission (Rs. Crore) ....................................................................................... 62
Table 31:RoE for FY 2020-21 to FY 2023-24approved by the Commission (Rs.
Crore)................................................................................................................................. 62
Table 32: Non-Tariff Income as per Petitioner for FY 2020-21 to FY 2023-24(Rs.
Crore)................................................................................................................................. 63
Table 33: Non-Tariff Income for FY 2020-21 to FY 2023-24approved by the
Table 34: Actual and Normative Operational Parameters for Fuel Cost for FY 2020-
21 and FY 2021-22........................................................................................................... 65
Table 35: Sharing of Financial gain on Fuel Cost for FY 2020-21 and FY 2021-22 .. 65
Table 36: ARR for FY 2020-21to FY 2023-24 for RGTPP approved by the
Table 37: ARR for FY 2020-21 to FY 2023-24 for BGTPP approved by the
Table 38: ARR for FY 2020-21 to FY 2023-24 for GHEP approved by the
Table 39: ARR for FY 2020-21 to FY 2023-24 for Generation Business approved by
the Commission (Rs. Crore) ............................................................................................ 69
Table 40: Generation Tariff for FY 2023-24 approved by the Commission ................ 70
Table 41: Transmission Loss from FY 2020-21 to FY 2023-24as submitted by the
Petitioner (%) .................................................................................................................... 72
Table 42: Transmission Loss from FY 2017-19 to FY 2022-23approved by the
Commission (%) ............................................................................................................... 73
Table 43: O&M Expense for Transmission Business for MYT Period (Rs. Crore) as
submitted by the Petitioner .............................................................................................. 73
Table 44: Normative and actual O&M Expenses for FY 2020-21 and FY 2021-22(Rs.
Crore)................................................................................................................................. 75
Table 45: O&M Expenses approved for FY 2020-21 to FY 2023-24 by the
Table 46: Rate of Depreciation as per Tariff Regulations ............................................ 76

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Table 47: GFA and Depreciation for Transmission Asset - Petitioner (Rs. Crore) .... 76
Table 48: Capitalisation of Assets for Transmission Business - Petitioner (Rs. Crore)
........................................................................................................................................... 77
Table 49: GFA and Depreciation for Transmission Asset as approved by the
Table 50: Calculation of RoE for Transmission Business as submitted by the
Petitioner (Rs. Crore) ....................................................................................................... 79
Table 51: Equity Base for Transmission for FY 2020-21 to FY 2023-24 approved by
theCommission (Rs. Crore) ............................................................................................. 80
Table 52: Return on Equity for Control Period for Transmission Business as
approved by the Commission (Rs. Crore)...................................................................... 80
Table 53: Interest rate on Working Capital (%) ............................................................. 81
Table 54: Interest on working Capital for Transmission Business as submitted by
TSECL (Rs. Crore) ........................................................................................................... 81
Table 55: Interest on working Capital for Transmission Business as approved by the
Table 56: Non-Tariff Income for Transmission Business as per Petitioner for FY
2020-21 to FY 2022-23(Rs. Crore) ................................................................................. 82
Table 57: Non-Tariff Income for Transmission Business for FY 2020-21 to FY 2023-
24 approved by Commission (Rs. Crore) ....................................................................... 82
Table 58: Aggregate Revenue Requirement for Transmission Business approved for
FY 2020-21 to FY 2022-23 in Tariff Order dated 02.09.2022 (Rs. Crore) .................. 83
Table 59: Aggregate Revenue Requirement for Transmission Business for FY 2020-
21 to FY 2023-24 as submitted by the Petitioner and approved by the Commission
(Rs. Crore) ........................................................................................................................ 84
Table 60: Growth rate for projection of sales Category wise - by TSECL .................. 86
Table 61: Category-wise Sales submitted by TSECL (MU) ......................................... 87
Table 62: CAGR computed by the Commission............................................................ 87
Table 63: Category wise Number of Consumers and Connected Load approved by
Commission for FY 2022-23and FY 2023-24 ................................................................ 88
Table 64: Category-wise Sales approved by the Commission (MU) ........................... 88
Table 65: Distribution and T&D Loss from FY 2020-21 to FY 2023-24(%) ................ 89
Table 66: T&D Loss from FY 2020-21 to FY 2023-24approved by the Commission
(%) ..................................................................................................................................... 91
Table 67: Energy Balance for FY 2020-21 to FY 2023-24as submitted by the
Petitioner ........................................................................................................................... 93
Table 68: Inter State Transmission Loss approved by Commission (%) .................... 94
Table 69: Energy Balance for FY 2020-21 to FY 2023-24 as approved by the
Commission (MU) ............................................................................................................. 94

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Table 70: Actual Power Purchase Cost from FY 2020-21 and FY 2021-22as
submitted by Petitioner .................................................................................................... 95
Table 71: Power Purchase cost for FY 2022-23 and FY 2023-24 as submitted by
TSECL ............................................................................................................................... 95
Table 72: Power Purchase cost for FY 2020-21 and FY 2021-22approved by the
Commission ...................................................................................................................... 96
Table 73: Power Purchase cost for FY 2022-23and FY 2023-24approved by the
Commission ...................................................................................................................... 96
Table 74: Intra State Transmission Charges (Rs. Crore) as submitted by the
Petitioner ........................................................................................................................... 97
Table 75: Intra State Transmission Charges approved by the Commission (Rs.
Crore)................................................................................................................................. 97
Table 76: O&M Expense for Control Period as submitted by the Petitioner (Rs.
Crore)................................................................................................................................. 99
Table 77: O&M Expenses approved for FY 2020-21 to FY 2023-24 by the
Commission (Rs. Crore) ................................................................................................ 100
Table 78: Depreciation rate as per TERC MYT Regulations, 2015........................... 101
Table 79: GFA and Depreciation for Distribution Asset as submitted by Petitioner
(Rs. Crore) ...................................................................................................................... 101
Table 80: Approved Capitalisation of Assets for Distribution business (Rs. Crore) . 102
Table 81: GFA and Depreciation for Distribution Asset as approved by the
Table 82: Interest and Finance Charges for FY 2020-21 to FY 2023-24– submitted
by TSECL (Rs. Crore) .................................................................................................... 104
Table 83: Interest and Finance Charges for FY 2020-21 to FY 2023-24 approved by
Table 84: Interest on Working Capital as submitted by Petitioner for Distrbution (Rs.
Crore)............................................................................................................................... 106
Table 85: Interest on working Capital for distribution business as approved by the
Table 86: Calculation of RoE on Pre-tax basis as per TSECL (Rs. Crore) .............. 107
Table 87: Equity Base for Distribution for FY 2020-21 to FY 2023-24 approved by the
Table 88: Return on Equity for Control Period for DistributionBusiness as approved
by the Commission (Rs. Crore) ..................................................................................... 109
Table 89: Non-Tariff Income as per Petitioner for FY 2020-21 to FY 2023-24(Rs.
Crore)............................................................................................................................... 109
Table 90: Non-Tariff Income for FY 2020-21 to FY 2023-24approved by the

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Table 91: Sharing of efficiency gains for Interest on Working capital for Distribution
for FY 2020-21 and FY 2021-22 (Rs. Crore) ............................................................... 110
Table 92: Sharing of efficiency gains for Interest on Working capital for Distribution
for FY 2020-21 and FY 2021-22(Rs. Crore) ................................................................ 111
Table 93: Additional Energy purchase on account of increase in T&D losses for FY
2020-21 and FY 2021-22 (in MU) ................................................................................. 111
Table 94: Cost of additional energy purchase for FY 2017-18 to FY 2020-21 ......... 112
Table 95: Aggregate Revenue Requirement for Distribution Business approved for
FY 2020-21 to FY 2022-23 in Tariff Order dated 02.09.2022 (Rs. Crore) ................ 112
Table 96:Aggregate Revenue Requirement for FY 2020-21 to FY 2023-24 of
Distribution business approved by the Commission (Rs. Crore) ............................... 114
Table 97: Revenue for FY 2020-21 to FY 2023-24(Rs. Crore) .................................. 115
Table 98: Revenue from Inter-State sales from FY 2020-21 to FY 2023-24(Rs.
Crore)............................................................................................................................... 115
Table 99: Revenue subsidy from FY 2020-21 to FY 2023-24 (Rs. Crore) ............... 115
Table 100: Total Revenue from FY 2020-21 to FY 2023-24as per Petitioner (Rs.
Crore)............................................................................................................................... 116
Table 101: Total Revenue from FY 2020-21 to FY 2023-24approved by the
Table 102: Revenue Gap/(Surplus) for FY 2020-21 to FY 2023-24considered by the
TSECL (Rs. Crore) ......................................................................................................... 117
Table 103: Total Revenue Gap considered by TSECL (Rs. Crores) ........................ 117
Table 104: Revenue Gap/(Surplus) for FY 2020-21 to FY 2023-24 approved by
Table 105: Calculation of Carrying cost as approved by Commission (Rs. Crores) 118
Table 106: Total Revenue Gap including Past Regulatory assets approved by
Commission (Rs. Crores) .............................................................................................. 118
Table 107: Scenario proposed by Petitioner to recover Revenue Gap ..................... 120
Table 108: Average Cost of Supplyfor FY 2023-24 approved by the Commission . 121
Table 109: Allocation Matrix for segregation of Wire and Supply business ............. 122
Table 110: Segregation of ARR for Distribution Business as approved by the
Table 111: Wheeling Charges for FY 2023-24 as approved by the Commission .... 123
Table 112: ABR/ACoS for FY 2032-24 as approved by the Commission ................ 123
Table 113: Calculation of C for computation of CSS for FY 2023-24........................ 126
Table 114: Computation of System Loss for FY 2023-24 .......................................... 126
Table 115: Computation of Transmission and wheeling charges per unit for FY 2023-
24 ..................................................................................................................................... 126
Table 116: Cross Subsidy Surcharge for FY 2023-24as approved by the Commission

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......................................................................................................................................... 127
Table 117: Miscellaneous and Other Charges as approved by the Commission .... 141

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Before the
TRIPURA ELECTRICITY REGULATORY COMMISSION

Bidyut Bhawan, Banamalipur, Bhutoria,
Agartala – 799001 (Tripura)
Coram
Honourable Shri. D. Radhakrishna, Chairman
Honourable Shri. Jiban Krishna Sen, Member
Dated: 22September, 2023

Petition No: 3 (Truing-up) of 2023
In the matter of ……………….

Petition of Tripura State Electricity Corporation Limited (TSECL) for Truing-up of FY
2020-21 and FY 2021-22 for Generation, Transmission and Distribution Business
under TERC MYT Regulations,2015 and Section 62 of Electricity Act, 2003.
By
Tripura State Electricity Corporation Limited (TSECL) ….. Petitioner
Bidyut Bhawan, North Banamalipur

Agartala – 799001
Tripura

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Petition No:4 (MYT) of 2023
In the matter of ……………….

MYTTariff Petition of Tripura State Electricity Corporation Limited (TSECL) for FY 2022-23 to
FY 2023 -24 for Generation, Transmission and Distribution and retail Supply Business under
TERC MYT Regulations, 2015 along with the Annual Performance Review of FY 2020-21
and direction issued by TERC under Section 62 of the Electricity Act 2003.
By
Tripura State Electricity Corporation Limited (TSECL) ….. Petitioner
Bidyut Bhawan, North Banamalipur

Agartala – 799001
Tripura

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ABBREVIATIONS
A&G Administrative and General

Act Electricity Act, 2003
AGBPP Assam Gas Based Power Plant
AGTPP Agartala Gas Turbine Power Plant
APTEL Appellate Tribunal for Electricity
ARR Aggregate Revenue Requirement
AT&C Aggregate Technical and Commercial
BGTPP Baramura Gas Thermal Power Plant
BPL Below Poverty Line
CAG Comptroller and Auditor General
CAGR Compounded Annual Growth Rate
Capex Capital Expenditure
CERC Central Electricity Regulatory Commission
CGS Central Generating Stations
Ckt. Km Circuit Kilometre
CPI Consumer Price Index
Crs. Crore
CWIP Capital Works in Progress
DHEP Doyang Hydro-Electric Project
DPR Detailed Project Report
FPPCA Fuel and Power Purchase Cost Adjustment
FY Financial Year
GAIL Gas Authority of India Limited
GFA Gross Fixed Assets
GHEP Gumti Hydro-Electric Project
GoT Government of Tripura
HEP Hydro-Electric Project
HSD High Speed Diesel
HT High Tension
IEX Indian Energy Exchange
Kcal kilo calorie
kV kilo Volt
LT Low Tension
MMSCM Million Metric Standard Cubic Metre

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MoP Ministry of Power

MU Million Units
MW Mega Watt
NEEPCO North Eastern Electric Power Corporation Limited
NEP National Electricity Policy
NER North Eastern Region
NHPC National Hydro Power Corporation Limited
NTI Non-tariff Income
O&M Operation and Maintenance
ONGC Oil and Natural Gas Corporation
OTPC ONGC Tripura Power Company
PFC Power Finance Corporation
PGCIL PowerGrid Corporation of India Limited
PLF Plant Load Factor
PLR Prime Lending Rate
POSOCO Power System Operation Corporation Limited
R&M Repair and Maintenance
R-APDRP Restructured Accelerated Power Development and
Reforms Programme
REC Rural Electrification Corporation
RGGVY Rajiv Gandhi Grameen Vidyutikaran Yojana
RGTPP Rokhia Gas Thermal Power Plant
RHEP Ranganadi Hydro-Electric Project
RLDC Regional Load Dispatch Centre
Rs. Rupees
SBI State Bank of India
SCM Standard Cubic Metre
SLM Straight Line Method
T&D Transmission and Distribution
TERC Tripura Electricity Regulatory Commission
TP Tariff Policy
TPP Thermal Power Plant
TPGL Tripura Power Generation Limited
TSECL Tripura State Electricity Corporation Limited
WPI Wholesale Price Index

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1 Background and Salient Features of the Order
1.1 Background
1.1.1 Tripura State Electricity Corporation Limited ((hereinafter referred to as ‘TSECL’ or
the ‘Petitioner’ or the ‘Utility’) was formed and registered under the Companies Act
1956 on 9 June, 2004, in compliance with the MOU among Ministry of Power,
Government of India & Government of Tripura on 28 August, 2003. TSECL was
made functional, under section 131 & 133 of the Electricity Act 2003 (hereinafter
referred to as “the Act” or “the EA, 2003”), w.e.f. 1 January, 2005 with the
operational control of all assets related to Generation, Transmission, Distribution & its
allied activities related to power sector of Tripura transferred to TSECL from
Government of Tripura. TSECL was the sole electricity utility in Tripura responsible
for generation, transmission and distribution of electricity in the State.
1.1.2 Tripura Power Generation Limited (TPGL) has been formed with all generation
assets of TSECL with effect from June, 2015. TPGL which is now responsible for the
State generation started functioning as an operational independent entity from
September 2016. However, the demerger of TPGL from TSECL as per provisions of
Companies Act, 2015, is still awaited, post which the independent functioning of
TPGL shall commence. Accordingly, TSECL filed a combined Petition for generation
and distribution.
1.1.3 TSECL filed a Petitionfor Truing-up of FY 2020-21 and FY 2021-22 and
determination of Aggregate Revenue Requirement (ARR) for FY 2023-24 and Retail
Supply Tariff for FY 2023-24 along with Annual Performance Review of FY 2021-
22as per Section 62 of the Act read with Tripura Electricity Regulatory Commission
(Tariff Procedure) Regulations, 2004, Tripura Electricity Regulatory Commission
(Conduct of Business) Regulations, 2004 andTripura Electricity Regulatory
Commission Tariff Regulations (Multi Year Tariff), 2015 (hereinafter referred to as
“TERC MYT Regulations, 2015”).
1.1.4 TSECL in the said Petition has submitted that it has not segregated the account
statements for Generation, Transmission and Distribution business completely and
the allocation has been undertaken based on certain principles as provided in the
Petition. The break-up of costs in Generation, Transmission and Distribution
business, wherever necessary for ARR and Tariff calculation, have been done based
on the division wise break-up of account statements and making suitable
assumptions, as necessary, for the common functions like accounts and finance, HR,
projects etc. at corporate level.
1.1.5 The Petitioner has submitted auditedaccounts FY 2020-21, FY 2021-22, and half
year of FY 2022-23. Also, the ARR and tariff for FY 2022-23 and FY 2023-24 has
been projected based on the actual data of past years and norms of TERC MYT
Regulations, 2015, as applicable.
1.1.6 The Commission notified TERC MYT Regulations, 2015 on 18 December, 2015 and

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the said Regulations were applicable from the date of notification and shall remain in
force for a period of five (5) years from the date of publication or until notification of
the revised Regulations whichever is later. Since the period of five years is over and
the said Regulations are still applicable, the Commission has determined tariff for FY
2022-23 only and not for FY 2022-23 and FY 2023-24 as there is no such provision
to determine the tariff for two years.
1.1.7 Accordingly, the Commission in the present tariff proceedings is dealing with the
following in respect of Petitions filed by TSECL for Truing-up of FY 2020-21 and FY
2021-22 and determination of Aggregate Revenue Requirement (ARR) for FY 2023-
24 and Retail Supply Tariff for FY 2023-24 along with Annual Performance Review of
FY 2021-22 as per TERC MYT Regulations, 2015 for Generation, Transmission and
Distribution Business.
1.2 Tariff Orders issued by the Commission earlier:

1.2.1 The chronology of the filing of the Tariff Petitions and issuance of the Tariff Orders
from FY 2005- 06, are listed below:
1.2.2 TSECL filed its first Tariff Petition for FY 2005-06 in accordance with the TERC Tariff
Regulations, 2004. The Commission, in exercise of the powers vested under
Sections 61, 62 and 64 of the Act carried out a detailed review of the Petition and
issued its first Tariff Order on 24 June, 2005.
1.2.3 TSECL filed its second Tariff Petition for FY 2006-07 on 4 August, 2006 in
accordance with Section 62 of the Act and TERC Tariff Regulations, 2004. The
Commission, in exercise of the powers vested under Sections 61, 62 and 64 of the
Act issued its second Tariff Order on 14 September, 2006.
1.2.4 In FY 2010-11, TSECL submitted a Petition for Fuel & Power Purchase Cost
Adjustment (FPPCA) for approval of adjustment of cost against increase of fuel (gas)
cost for its own generating stations, namely, Rokhia Gas Thermal Power Plant
(RGTPP) and Baramura Gas Thermal Power Plant (BGTPP), and cost incurred for
procurement of power from the Central Generating Stations (CGS). The Commission,
after due examination of the Petition and considering all the aspects of this matter,
issued the FPPCA Order on 13 September, 2010. The Commission subsequently
issued the amendment to the Order on 22 September, 2010 after allowing subsidy to
some categories of consumers, wherein the Commission allowed Rs. 1.40/unit as
FPPCA charge.
1.2.5 TSECL did not file any ARR and Tariff Petition from FY 2007-08 to FY 2011-12
despite several reminders from time to time by the Commission. Non-finalization of
the Annual Accounts from FY 2007-08 to FY 2011-12 was the main reason for non-
submission of the Tariff Petitions.
1.2.6 Subsequently, after a hiatus of 6 years from the issuance of the second Tariff Order
of the Commission, the Petitioner filed its third ARR and Tariff Petition on 20 January,

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2012 (Case No. 01 of 2012) for approval of ARR and Tariff for FY 2012-13 along with
the Truing-up of ARR for the period from FY 2007-08 to FY 2010-11. As highlighted
above, in absence of the audited Annual Accounts for FY 2005-06 and FY 2006-07,
the truing-up exercise could not be completed previously. The Commission,
according to Regulation 3 of the TERC Tariff Regulations, 2004 and Regulation 25(1)
of the TERC (Conduct of Business) Regulations, 2004, also undertook the suo-motu
proceedings for truing-up of FY 2005-06 and FY 2006-07 and included the same in
the tariff proceedings for FY 2012-13. On 28 March 28, 2012, the Commission issued
the third Tariff Order for TSECL, approving the ARR and tariff for FY 2012-13 along
with truing up for the period from FY 2005-06 to FY 2010-11.
1.2.7 The Petitioner filed its fourth ARR and Tariff Petition on 15 March, 2013, for approval
of ARR and Tariff for FY 2013-14 along with the truing-up of the ARR of FY 2011-12
and Review of ARR for FY 2012-13. The Commission, in exercise of the powers
vested under Sections 61, 62 and 64 of the Act and all other powers enabling it in
this regard and after taking into consideration the submissions made by TSECL, the
objections by various stakeholders, response of TSECL, issues raised during the
Public Hearing and all other relevant material, issued the fourth Tariff Order for
TSECL on 25 June, 2013.
1.2.8 Subsequently, the Commission issued an Order with regard to truing-up for FY 2012-
13, Review of FY 2013-14 and determination of Tariff for FY 2014-15 on 22
November, 2014.
1.2.9 Further, the tariff order was passed on 1 September, 2020 after almost 6 years with
regard to truing-up for FY 2013-14 to FY 2015-16, determination of the ARR for FY
2016-17 to FY 2020-21 and Retail Tariff for FY 2020-21.
1.2.10 Thereafter, the tariff Order was issued on 2September, 2022 for truing up for FY
2017-18 to FY 2019-20, determination of ARR for MYT Control Period from FY 2020-
21 to FY 2022-23 and Retail supply tariff for FY 2022-23.
1.3 Admission of Current Petition filed by TSECL

1.3.1 TSECL has filed Petition No.3 (Truing-up) of 2023for Truing-up of FY 2020-21 and
FY 2021-22 and Petition No.4 (MYT) of 2023determination of Aggregate Revenue
Requirement (ARR) for FY 2023-24 and Retail Supply Tariff for FY 2023-24 along
with Annual Performance Review of FY 2022-23as per TERC MYT Regulations,
2015 for Generation, Transmission and Distribution Business. The Prayers of TSECL
are as given below:
1.3.2 Petition No.3 (Truing-up) of 2023
a. Admit this Petition;
b. Examine the proposal submitted by the Petitioner for a favourable
dispensation as detailed in the enclosed proposal;

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c. Consider the submissions and allow the proposed Truing up for FY 2020-
21;
d. Pass suitable orders for implementation of the tariff proposal;
e. Approve the terms and conditions of tariff and various other matters as
proposed in this petition and the proposed changes therein.
f. Condone any inadvertent omissions/ errors/ shortcomings and permit
TSECL to add/ change/ modify / alter this filing and make further
submissions as may be required at a future date.
g. Pass such orders as the Hon’ble Commission may deem fit and proper,
keeping in view the facts and circumstances of the case;
1.3.3 Petition No. 3 (Truing-up) of 2023

b. Examine the proposal submitted by the Petitioner for a favourable
c. Consider the submissions and allow the proposed Truing up for FY 2021-
22;
Petition No.4 (MYT) of 2023

b. Examine the proposal submitted by the Petitioner for a favorable
c. Consider the submissions and allow the proposed MYT for FY 2022-23 to
FY 2023-24;

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1.3.4 On preliminary scrutiny of the Petition, the Commission observed several

discrepancies and gaps in the Petition filed by TSECL. The Commission observed
that as per theTERC MYT Regulations, 2015 and TERC Tariff Procedure
Regulations, 2004, significant data and information that is important to process the
Tariff Petition was not submitted by the Petitioners. Hence, the Commission sent
preliminary data gaps to TSECL citing several discrepancies and gaps in the Petition
and supporting information. The reply to data gaps submitted by the Petitioner has
been considered by the Commission.
1.4 Public Consultation Process

1.4.1 After admission of the ARR and Tariff Petition, the Commission, in accordance with
Section 64 of the Act and Clause 10 of the TERC (Tariff Procedure) Regulations,
2004, directed TSECL to publish its Tariff Petition in abridged form in the newspapers
and on their website. Accordingly, the abridged form of the Petition was published on
19.05.2023 in the leading newspapers in Tripura. The Petitioner also posted the
public notice and the Petition on their website (www.tsecl.in). The publication invited
the attention of all interested parties, stakeholders including members of the public
for their objections/suggestions on the said Petition of TSECL on or before
03.06.2023.
1.4.2 The following stakeholder filed his objections on the Petition of TSECL:
Table 1: Name of the Objectors who filed objections/suggestions in writing on Tariff Petition of
TSECL
Sr. No. Name

1 Tripura Electricity Consumer’s Association (TECA)
2 ILS Hospitals
3 Tripura Medical College and Dr. BRAM Teaching Hospital
4 ML Plaza and Rupasi Multiplex Co.
5 Directorate of Industry & Commerce
6 Mr. Anup Bhowmik, Consumer
1.4.3 The Commission examined the objections received from the objector and fixed the
date for public hearing as on 16 June, 2023. The Commission invited the objector to
take part in the Public Hearing process and present his views in person before the
Commission. The Commission, subsequently published the Notice for Public Hearing
in the newspapers on12 June, 2023

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1.4.4 The public hearing was conducted at the Commission’s office in Banamalipur,
Agartala on 16 June, 2023.
1.4.5 The Commission has ensured that the due process contemplated under the Law to
ensure transparency and public participation was followed at every stage and
adequate opportunity was given to all concerned to express their views. The
suggestions and objections raised on TSECL’s Petition in writing as well as orally
during the Public Hearing, along with TSECL’s response and the Commission’s
Rulings are summarised in Section 2 of this Order.
1.5 State Advisory Committee

1.5.1 The tariff proposal of TSECL was placed before the State Advisory Committee (SAC)
in its meeting held on 13 June, 2023 at the Commission’s Office. The Committee
members were briefed on the Petition filed by TSECL.
1.5.2 The SAC members desired that the Commission should verify all the elements of the
ARR before issuing the Tariff Order for FY 2023-24. All the members raised their
apprehensions on enormous tariff increase required based on the submissions of the
Petitioner and requested the Commission to look into the reasonableness of the
same.
1.5.3 Thus, the Commission has taken all the necessary steps to ensure that the due
process, as contemplated under the Act and Regulations framed by the Commission,
are followed and adequate opportunity were given to all stakeholders in presenting
their views on the Tariff Petition submitted by TSECL.
1.6 Content of the Order

This Order is organised in the following Sections:
1.6.1 Chapter 1 (this Chapter) provides a background of the Petitioner, the Petition, public
hearing process, and the approach adopted for this Order;
1.6.2 Chapter 2 summarises the written and oral suggestions and objections raised. These
are followed by the responses of TSECL and the rulings of the Commission;
1.6.3 Chapter 3 deals with Truing up of FY 2020-21 and FY 2021-22 and ARR for FY
2023-24 and Generation Tariff for FY 2023-24 along with Annual Performance
Review of FY 2022-23;
1.6.4 Chapter 4 deals with Truing up of FY 2020-21 and FY 2021-22 and ARR for FY
2023-24 along with Annual Performance Review of FY 2022-23for TSECL for
Transmission business;
1.6.5 Chapter 5 deals with Truing up of FY 2020-21 and FY 2021-22 and ARR for
FY2023-24 and Retail Supply Tariff for FY 2023-24 along with Annual Performance
Review of FY 2022-23 for Distribution business;
1.6.6 Chapter 6 summarises the Directives of the Commission;

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1.6.7 Chapter 7 details the Commission’s Tariff Philosophy and the category-wise retail
supply tariffs applicable for FY 2023-24, including charges for Open Access
consumers.

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2 Suggestions/Objections, TSECL’s responses and Commission’s

Ruling
2.1.1 This section deals with the suggestions/objections raised by various Stakeholders
regarding the tariff Petition submitted by TSECL, details of which were provided in
the public notice published in various newspapers mentioned earlier. Submissions
and responses, pertaining to specific and detailed aspects of tariff, have been
taken into account in the formulation of equitable tariff, balancing the interests of
stakeholders. The Commission has not considered the submissions which are
not related to tariff determination.
2.1 Objection: Discount to Commercial Tariff to be given for Hospitals
2.1.1 ILS Hospitals and Society for Tripura Medical College and Dr BRAM Teaching
Hospital have sought for allowing concessional /discounted tariff compared to the
existing Commercial Tariff considering the high operating cost and that these
hospitals provide treatment at concessional rate to BPL Families and super speciality
treatments are available at much lower costs. The hospital also has to incur
considerable expenses on maintaining two 500 kVA generator sets for providing back
up power because of non-continuity of supply. ILS Hospitals also submitted that
similar concessions have been provided to hospitals by different State Governments
viz. Maharashtra and Gujarat, considering the role of hospitals in providing services
to the people. Society for Tripura Medical College and Dr BRAM Teaching Hospital
have also additionally submitted that tariff is unbearable on the part of the Society
which is running on no loss no profit basis.
TSECL’s Reply
2.1.2 TSECL submitted that no increase of electricity tariff in Tripura in the last 8 years
since November 2014. During this period, the cost of TSECL on various heads have
increased substantially as detailed in the tariff petition. The average increase in the
common inflation indices during this period shown below is more than 32% and the
increase in inflation is more pronounced in the last few months due to the change in
the global geopolitical scenario.
Combined
Particulars FY 15-16 FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23
8 years
Wholesale 2.32%
-3.65% 1.73% 2.92% 4.28% 1.68% 1.27% 12.98% 23.53%
Price Index
Consumer
5.65% 4.12% 3.08% 5.45% 7.53% 5.02% 5.07% 4.9% 40.28%
Price Index
Average of WPI and CPI for last 8 years
32.34%
2.1.3 Steep rise in Wholesale Price Index (WPI) and Consumer Price Index (CPI) after the
consequences of the COVID-19 pandemic has resulted in an increase in supply
costs, material costs, raw material price, etc. which resulted in overall hike in
generation costs.Tariff hike for it is critical to recover the increase in additional costs

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accrued over the past few years as well as to recover the pending accumulated gap
of past years. TSECL has accumulated losses of more than INR 557 crores as on
31st March 2023 as per the audited account statements.
2.1.4 Moreover, this pandemic has also impacted the power utilities in a big way and the
revenues of the power distribution utilities were reduced due to the lockdown
imposed to tackle COVID 19 as well as rebate in tariff provided in the last tariff order.
As such, a tariff increase is critical for the financial sustainability of TSECL.
2.1.5 Moreover, it is not possible and viable to reduce the tariff or show preference for one
consumer (like ILS in this case) as it is against the principles laid down in Section 62
(3) of Electricity Act 2003. Creating a special concessional tariff category for only
private hospitals or only for ILS hospitals would result in requests from other private
healthcare institutions for providing them with concessional categories as well. This
would result in TSECL being accused of having preferential treatment which TSECL
cannot provide keeping in mind the interest of all other consumers across various
categories in the state.
2.1.6 In addition to the above, it is important to note that the state of Tripura primarily has
small domestic consumers and with limited presence of big industrial or large
commercial consumers, a further reduction in tariff of commercial consumers, TSECL
would not be able to supply reliable and affordable power to all the consumers in
state particularly, poor rural households. As such, the socio-economic situation in
Tripura is very different from the large industrial states like Maharashtra or Gujarat.
Tripura being a North-Eastern state has to bear considerable costs in terms of
transportation and being far away form most of the manufacturing hubs of the country
has to rely on distant suppliers which has a higher cost incursion on it compared to
other states which has regional connectivity advantage being at the heartland of
India.
2.1.7 It is also pertinent to note that state like Maharashtra and Gujarat have a higher rate
of base tariff per kWh compared to Tripura. TSECL has not been able to revise tariffs
under Commercial category for the past 9 years. Besides Tripura has very low Fixed
charges rate compared to other states like Maharashtra and Gujarat, which is only
Rs 75/kVAh compared to Rs 400-450/kVAh in other states. Also, TSECL provides
rebate in certain government run health care institutions as they are mainly run
through Government based subsidy funds. Thus, creating a more concessional tariff
category would eventually put a burden on the existing financial crunch of TSECL
further.
2.1.8 From the above, it can be summarized that rebate or discount in tariff cannot be
provided to one consumer or a type of consumer other than for the reasons allowed
in Electricity Act 2003. Moreover, the retail supply tariff needs to be increased in
alignment with the increasing costs of TSECL, accumulated losses and in general
increasing inflation across the globe.

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Commission’s Ruling
2.1.9 The Commission is bound to fix up the tariff as per Tariff Regulations and no special
dispensation can be given to any particular categories of consumers unless it has a
social implication. It may also be observed that hospital services are based on
economics of patients and therefore the Commission is constraint not to give any
concessional tariff to any particular hospitals. However, one of the objects of
Electricity Act is to promote competition and consumers are free to move into the
markets or look for alternative cheaper sources like solar, etc which Commission is
along with the government is encouraging so that consumers get cheaper power.
2.2 Objection: ARR Petition for FY 2023-24

TECA submitted that TSECL in its Petition has considered the ARR for FY 2023-24
on the basis of projection of costs considering the average growth rate of 3 years
actual. If any increase in ARR is adjusted in tariff of subsequent years on the basis
ARR submitted based on audit report, then there would be considerable increase in
tariff. Hence, present petition should not be accepted by TERC.
TSECL’s Reply
2.2.1 TSECL has filed the present MYT petition based on TSECL MYT Regulations 2015
which provides for filing of annual petitions with truing up of past years, revised ARR
of current year and projected ARR of future years. This is as per standard regulatory
practice and regulatory norms.
2.2.2 The Commission notes that TSECL submitted the Petition based on the provisions of
TERC MYT Regulations, 2015. The Commission has undertaken the truing up for FY
2020-21 and FY 2021-22 and determination of ARR for FY 2022-23 & FY 2023-24 as
per the provisions of TERC MYT Regulations, 2015, which has been discussed in the
subsequent Chapters of this Order.
2.3 Objection: Allowance of Higher Return on Equity by separation of TSECL

2.3.1 TECA submitted that higher Return on Equity is allowed to TSECL by segregating
the business into Generation, Transmission and Distribution. If Return on equity is
allowed to TSECL as undivided utility then there would be substantial reduction in
Return on equity and thereby reduction in tariff. To safeguard the interest of
consumers, Return on Equity should not be allowed more than 16% for all three
businesses of TSECL.
2.3.2 TECA further submitted that allowance of Return on Equity of 15.5% to Generation
business would lead to tariff hike of 15.5%, which is against the interest of
consumers. Hence, TSECL should not be segregated into three businesses as

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Generation, Transmission and Distribution
TSECL’s Reply
2.3.3 TSECL submitted that, the claim of return on equity is as per the TERC MYT
Regulations 2015 and standard regulatory norms which allow claim of a reasonable
return on the investments made in the business to make it sustainable. The returns
claimed on generation, transmission and distribution are separate and cannot be
added up as percentages as they are claimed on separate bases. The total amount
of return on equity is a small portion of the ARR and necessary for sustainable
operation of the business and as per standard regulatory and economic practice.
2.3.4 The separation of TPGL shall have no impact on the overall ARR as there is no
increase in the return on equity as a result of separation. The equity amount and the
overall asset amount for integrated company will be same as the combined equity of
the segregated companies. The Tariff hike proposed by TSECL is based on the ARR
gap which has been accumulated over the years and the figures have been
determined based on the True-up order submitted for FY 17-18 to FY 19-20 earlier
and for FY 20-21 to 21-22 in this current petition with MYT projected for the years FY
23 and FY 24. The tariff hike covers for the entire ARR recovery for all three
businesses of Generation, Transmission and Distribution.
2.3.5 The Commission has allowed Return on Equity to Generation, Transmission and
Distribution as per the provisions of TERC MYT Regulations, 2015. The allowance of
Return on Equity and treatment of tariff hike is discussed in subsequent Chapters of
this Order. It may also be mentioned that whenever MYT Regulations are floated and
comments are invited the Commission always care for taking up the comments of
stakeholders into consideration once the Regulations are framed it may not be
appropriate to make the comments.
2.4 Objection: Performance Parameters for RGTPP and BGTPP

2.4.1 TECA submitted that Gross generation and PLF of RGPP has reduced from FY
2020-21 to FY 2022-23, which signifies the increased cost and uneconomical use of
resources. Also, in case of BGTPP, the Gross Generation and PLF have been
increased from FY 2020-21, which should have been led to decrease in cost of
generation. However, the tariff increase has been proposed in the Petition. Also, it is
submitted that PAF of RGTPP is much higher compared to PLF. For economical use,
PLF should be near to PAF.
2.4.2 TECA further submitted that Heat rate is proposed same for RGTPP and BGTPP
from FY 2021-22 onwards in spite of increase in Heat rate from FY 2020-21 to FY
2021-22. This reflects higher consumption of gas and there by higher cost. This is not
economical use of resources and inefficiencies should not be passed on to

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consumers.
2.4.3 Mr Anup Bhowmik submitted that TSECL needs to increase the efficiency in the
generation of power through adoption of latest technology and optimum utilisation of
resources.
TSECL’s Reply
2.4.4 Compared to the PLF, the availability factor of RGTPP and BGTPP are at around
95% and 65% respectively for the period FY 2020-21 - FY 2022-23 as compared to
the PLF. The availability factors for FY 23 & FY 24 have been increased based on
the current improvement in the units of the plants in BGTPP and improved fuel
supply scenario. PLF indicates the ratio of the actual energy generated by a power
plant to the maximum possible energy it could have generated during a given period
whereas the Plant Availability Factor (PAF) amount of time that it is able to produce
electricity over a certain period, divided by the amount of the time in the period. Thus,
there are two different factor which cannot be similar and equated hence this cannot
be a factor for non-consideration of tariff hike.
2.4.5 TSECL further submitted that RGTPP and BGTPP are Gas based thermal power
plants which are being run from natural gas sources. The high rate of heat value of
Gas based sources varies and is found to be on the higher side due to high calorific
value of natural gas. The natural gas supply is taken form GAIL and ONGC which is
administered under the APM and MDP pricing mechanism, thus TSECL has no
authority to control the prices, neither it has nay control to alter in the properties of
the gas supplied. Hence there is no quality issues in terms of fuel supplied to the
consumers, the entire generation process has been handling by TPGL (in association
with TSECL) efficiently.
2.4.6 TPGL is planning to take up the life extension and R&M of Gumti project under ADB
funding which would increase the generation and reduce the tariff of Gumti plant also
thereby further improving the affordability of power within the state
2.4.7 The Commission has allowed the performance parameters and sharing of gains on
account of the same as per provisions of TERC MYT Regulations, 2015 and the
same has been discussed in Chapter 3 of this Order.
2.5 Objection: Rate of Interest on Loan capital and Working Capital

2.5.1 TECA submitted that rate of interest on loan capital submitted as 7.55% for FY 2022-
23 and 9.40% for FY 2023-24. The rate of interest should be considered based on
actual values, not on projected basis. Also, normative rate of interest on working
capital are submitted as 11.15% to 12.40%, which is extremely high. Such higher
rate of interest should not be allowed.
2.5.2 TECA submitted that TSECL should switch on to Indian Bank loan having lower

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interest rates as compared to foreign currency loans.

2.5.3 Mr. Anup Bhowmik has raised issue of loan taken from REC and details given thereof
being typographical error.
TSECL’s Reply
2.5.4 TSECL submitted that the rate of interest on working capital is based on the
performance wise expenditure of TSECL and its rate of lending of interest from the
bank (i.e., SBI lending rates). The rate of interest has no control by TSECL and is
determined from the rates available for lending by the banks. The same could be
verified from SBI’s official website from its historical lending rates tally. Hence,
TSECL does not have any authority in lending rates specified by the Bank for its
operation and does not wish to impose on to its consumers. The tariff hike proposed
is based on the overall accumulated revenue gap resulted from the non-passing of
tariff which is due to the Utility over many years which its has not yet been recovered
due to non-hike in tariff.
2.5.5 TSECL submitted that the currency depreciation highlighted in the petition accounts
for gas price increase not for lending rates increase as TSECL lends its finances
from Indian banks on Indian currency only. It has no effect on the overall policy for
tariff hike and is not imposed on to the consumers.
2.5.6 The interest on REC Loan showing for FY 22 @ 10.5% is Rs 0.02 Crore is not a
typographical error, it is based on the account statements of TSECL and as per loan
details furnished in actual by TSECL.
2.5.7 The Commission has allowed the rate of Interest on loan capital and Working capital
as per provisions of TERC MYT Regulations, 2015 and the same has been
discussed and directions in the subsequent paragraphs.
2.6 Objection: Increase in Gas prices

2.6.1 TECA submitted that gas prices are increased by more than 40%. There is need to
find alternative way for thermal generation. The actual price of gas shall be submitted
for appropriate assessment of fuel cost for FY 2023-24. This unreasonable increase
in gas prices of 40% should not be allowed in FY 2023-24.
TSECL’s Reply
2.6.2 TSECL submitted that, as per the gas prices notified by MoPNG, GOI, it is observed
that there was an average increase of 30% in average gas price from FY 2017-18 to
FY 2019-20. From FY 19-20 to FY 20-21 the gas prices dipped by 40%. In Apr-22
more than 110% increase has been notified in raw APM gas price which is from USD
2.9/ MMBTU to USD 6.1/MMBTU. The increase of end cost after incorporation of

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foreign exchange, transportation cost, VAT etc. is going to further increase for TPGL.
2.6.3 TPGL has projected the fuel cost based on the latest rate as notified and effective
from April’22 and TPGL has already received a fuel bill based on the escalated rates
for the first fortnight of April’22. This is expected to increase the overall costs of
TSECL by around Rs. 250 Crore assuming the same levels of gas price is prevalent
for the entire year. The projection of the Fuel cost for the plants has been done
based on the explanation given above. Hence, the gas price increase projected in not
unreasonable, it is based on the Gas price increasing trend that has been notified
from the Ministry (MOPNG), TSECL has no control of it.
2.6.4 The Commission has already noted the increase in gas prices in FY 2023-24 and
projected gas prices by TPGL in the instant Petition. The Commission has sought the
data of actual gas prices based on invoices raised by Gas suppliers and accordingly
considered the gas prices for projection of Fuel cost for FY 2023-24. The approach
adopted and prudence undertaken by the Commission is discussed in Chapter 3 of
this Order.It may also be mentioned that gas is procured on a monthly price as per
Administrative Price Mechanism (APM) with discount of North-Eastern statesas well
as long term contract.
2.7 Objection: Depreciation

2.7.1 TECA submitted that depreciation of assets remains the same unless new asset is
added in the year.
TSECL’s Reply
2.7.2 TSECL submitted that the depreciation of assets is calculated yearly based on the
assets present and booked as per Companies Act, verified duly by the statutory
auditors in the audited accounts statements. Whether TSECL installs new assets or
not the depreciation needs to be calculated as it is taken on the fixed running assets
in operation to the Licensee. The assets which are discarded are not booked either
hence for fixed assets which are currently in operation has to be booked.
2.7.3 The Commission has allowed the Depreciation for TSECL as per provisions of TERC
MYT Regulations, 2015 and the same has been discussed in Chapters of this Order.
2.8 Objection: Tariff for Industry Category (New)

2.8.1 Directorate of Industries & Commerce submitted that as per the Tripura Industrial
Investment Promotion Incentive scheme (TIIPIS), scheme, 2022, power subsidy will
be provided to all eligible industrial units which commence their commercial
production in the state on or after the first day of April, 2022 but before or on thirty-

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first day of March. 2027”, as per the following norms:
i) The eligible industrial units with connected load up to 20 HP shall be provided

partial reimbursement of power charges @25% of power charges actually paid by the
enterprise, subject to a maximum amount of Rs. 15 Lakhs per enterprise per annum.
In case of thrust sector Industries, the annual upper ceiling shall be Rs.25 Lakhs per
enterprise per annum,
ii) Power charges shall be provided to all eligible industrial units with connected load
of above 20HP @ Rs.5.00 per unit without any upper ceiling.
TSECL’s Reply
2.8.2 TSECL submitted that as per the Section 65 of the Electricity Act, 2003, any
reduction in the tariff of any particular category of consumers as determined by the
State Commission could be implemented only if there is confirmed provision of
subsidy disbursement from the State Government. It may be noted that the TSECL
has no objection in providing reduced tariff rate to the Industrial consumers
registered under the Tripura Industrial Investment Promotion Incentive Scheme
(TIIPS), provided that:
(a) The above said incentive amount be compensated to TSECL by the State
Government in the form of subsidy given in advance so as to implement this
partial reimbursement of power charges as requested by the Directorate of
Industries in this regard. TSECL would have no hesitation to implement this if
assurance of subsidy is received from the State Government.
(b) The State Government confirms or notifies such provision to TSECL, so as to
TSECL gives such provisions in the tariff for the Industrial consumers under this
category.
(c) The tariff @ Rs 5.00/kWh for industrial consumers upto 20 HP of connected load
could be implemented to those industrial consumers who are registered under
the TIIPS scheme after April 1, 2022 till March 31, 2027, duly verified from the
Directorate of Industries and Commerce database. Also as mentioned above,
such notification gets confirmed by the State Government to TSECL.
(d) There is a definite assurance of subsidy to be disbursed from the State
Government to TSECL on this regard.
(e) The tariff as suggested above gets notified by the Commission as the
Commission directs the tariff in their respective tariff order, which TSECL follows
for the respective years. Hence, such provision of allowing reduced tariffs should
be confirmed by the Commission in particular in their respective tariff order to be
issued. The above reduction in tariff schedule to such Industries could be
implemented by TSECL as TSECL has no objections to such reductions provided
that the subsidy gets passed to TSECL by the State Government and could be
given to those industries who are registered on or after April 1, 2022 or to be
registered by March 31, 2027 and such tariff proposal gets approved by the

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Commission in their tariff order.
2.8.3 The Commission’s approach and tariff philosophy regarding Tariff for Industrial
Consumers is discussed in Chapter 7 of this Order.
2.8.4 The Commission rules that the power subsidies for new industries which will be
granted as per Government of Tripura policies be credited from the consumers bills
either severally or jointly for which TSECL and respective industries department can
work out modalities.
2.9 Objection: Increase in Electricity Bill Unit Price

2.9.1 Mr Ratan Saha has submitted that there has been increase in the bill inspite of
Agartala being declared as Smart City. He has also raised issue in respect of excess
billing by TSECL, more specifically fixed charges and frequent interruptions
TSECL’s Reply
2.9.2 TSECL submitted that the Agartala Smart City Development project is still
undergoing construction work and the allocation of the Smart City development
project has been allotted only till recently. Hence, the completion of the smart city
developmental work and upgrading the necessary infrastructure work will take time to
complete.
2.9.3 The fixed charges which are accounted for in the electricity bill are as per TERC tariff
order dated September 2022, where the Fixed Charge under the Bulk Supply of
power category of consumers are to be charged at Rs 75/kW/month. The Energy
charges are also charged as per the Tariff schedule proposed in the Tariff order as
finalized by the Commission at Rs 7.33/kWh. Hence TSECL is not procuring any
charges which is outside the purview of the Commission, nor it does it billing to the
consumers anything outside the proposed tariff order structure as finalized by the
Commission.
2.9.4 TSECL has undertaken the upgradation of Feeders and Distribution Transformers
(DTs) work under the recently launched RDSS scheme. Also, under the existing
IPDS scheme the strengthening of sub-transmission and distribution lines across the
urban network is still in progress
2.9.5 The Commission notes the submission of TSECL. It is observed that the issue raised
is of an individual consumer in respect of billing and interruptions. The Commission
is of the view that the issue is not related to the exercise of the tariff related Petition.
The Consumer may take up the issue with TSECL directly. TSECL is also expected
to the resolve the issues to the satisfaction of the Consumers in a timely manner as
per relevant provisions of Act, Rules and Regulations made thereunder and the

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Orders of the Commission. However, the Commission is cognisant of the issues of

the Consumer and has held in this Order that the Commission will also set up
monitoring cell for consumer grievances for pro-active interactions with stakeholders.
2.10 Objection: UDAY Scheme Details and Distribution Loss

2.10.1 Mr Anup Bhowmik has raised various issues related to UDAY MoU and assets being
created by TSECL along with details of Distribution Loss and ACS-ABR gap not
being provided by TSECL.
TSECL’s Reply
2.10.2 The UDAY MoU signed between the Ministry of Power, Government of India and
TSECL, Government of Tripura was for a period of between FY 2017-18 to FY 2019-
20, singed in 2017, where TSECL was tasked to achieve reduction in AT&C loss
levels form 33.8% in FY 15-16 to 15% in FY 19-20. TSECL has achieved reducing
AT&C losses to 26.11% in FY 22 under the RDSS scheme. The RDSS scheme
(Revamped Distribution Sector Scheme) has been introduced by the Government of
India to take of the pending revamping of distribution sector schemes which was
initially signed for UDAY scheme. The UDAY scheme to be noted, has been
discontinued since 2019-20. In place of UDAY scheme, the RDSS scheme has been
introduced where the electrification works are being undertaken such as 100% DT
metering, 100% smart metering, total replacement of old feeders with new one and
100% installation of new feeders in new distribution sector. TSECL has already
undertaken work for 100% DT metering under the RDSS scheme. As the UDAY
scheme was initiated only for setting the targets to be met by TSECL, the license has
not taken any financial assistances under this scheme. The RDSS schemes on the
other hand, was undertaken to implement these target set under the UDAY MoU so
as to achieve the initiatives which Govt. of India wants to achieve under the RDSS
scheme. The UDAY targets at present in now applicable and this has been replaced
by the RDSS schemes.
2.10.3 The Distribution Loss has a decreasing trend from 33.71% in FY 2018-19 to 24.74%
in FY 2020-21. Further TSECL is making sincere efforts in electrifying the un-
electrified areas of the state at a fast pace under grants and loans provided by the
Rural Electrification Corporation (REC) under the Rajiv Gandhi Gramin Viduyatikaran
Yojna (RGGVY) and Saubhagya Scheme. Through the implementation of the
scheme the TSECL has provided the electricity to the far-flung areas and villages of
the Tripura state. At the same time, due to increase in the LT network and the
domestic and Kutir Jyoti consumers, losses of the utility are also increasing at
considerable pace. Through different loss reducing measures and schemes the
TSECL has remained successful to contain the losses at the level mentioned. In the
past few years, TSECL has made limited investments in its distribution network for
modernization, system improvement and loss reduction. However, now, TSECL is
implementing large system improvement schemes under ADB funding as well as
under the GoI scheme of RDSS (Revamped Distribution Sector Scheme) to reduce

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losses and the effect of such measures is expected to gradually reflect in the
performance of Distribution losses.
2.10.4 For reducing the losses and for reducing the ACS-ARR several steps have been
taken among which RDSS is one of them along with REC electrification, IPDS
scheme, Saubhagya, RGGVY. These schemes have been undertaken with the
intention of providing 100% electrification and providing smart metering, DT metering,
replacing old assets with new ones, erecting new feeder lines and installing new DT,
substations, etc. for providing access to electricity to maximum consumers
2.10.5 The Commission notes the reply of TSECL on the issue raised by the Objector in
respect of UDAY Scheme Details. Further, as seen in the subsequent part of the
Order, the Commission has approved the Distribution Loss as per target approved in
the last tariff order and not as per actual loss submitted by TSECL. Further, based on
the approved ARR, the Commission’s approach and tariff philosophy regarding Tariff
to recover the ARR is discussed in Chapter 7 of this Order.

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3 Truing up of ARR for FY 2020-21 and FY 2021-22, APR of FY

2022-23and ARR of FY 2023-24for Generation Business
3.1 Background and Approach

3.1.1 The Commission in its Order dated 02 September 2022 in Case No. 2 of 2022 and 4
of 2022 has approved Truing-up for FY 2017-18 to FY 2019-20, Annual Performance
Review of 2020-21 and ARR determination for Generation, Transmission and
Distribution Business for FY 2021-22 and FY 2022-23 and Retail Supply Tariff for FY
2022-23 of TSECL.
3.1.2 The TERC Tariff Regulations, 2015 provides for truing-up of all the parameters of
ARR at the end of each year based on the audited annual accounts and prudence
check by the Commission. The Commission has conducted the truing-up for ARR for
FY 2020-21 and FY 2021-22based on the audited annual accounts submitted by
TSECL for the said period.
3.1.3 In compliance of the regulatory obligation, TSECL has filed True-Up Petition for FY
2020-21 and FY 2021-22 for Generation business, Transmission and Distribution &
Retail Supply business separately. The audited accounts of the respective years
along with the audit report is submitted as an Annexure along with the petition.
3.1.4 It is noted that, TSECL has not yet segregated the account statements for
Generation, Transmission and Distribution business and the same is under work in
progress. However, TSECL in its Petition has provided the break-up of costs in
generation, transmission and distribution business, wherever necessary for ARR and
tariff calculation, based on the division wise break-up of account statements and
making suitable assumptions, as necessary, for the common functions like Accounts
& finance, HR, Projects etc. at corporate level. As such, TSECL is submitting a
combined petition for generation, transmission and distribution business with
segregated ARR calculations. Accordingly, the Commission has relied upon the said
submission related to function-wise data submitted by TSECL along with replies to
data gaps submitted by TSECL for truing-up exercise.
3.1.5 The Petitioner has submitted the statutory audit of the account statements for FY
2020-21 and FY 2021-22. However, the actual performance of the plant and the
provisional accounts without any segregation of the expenses into Generation,
Transmission and Distribution business for FY 2020-21 has been provided. The
Commission has considered the same, wherever applicable for determination of
ARR.
3.1.6 Considering the details provided and additional information obtained during these
proceedings, the Commission has undertaken the truing up of ARR of TSECL
Generation business for FY 2020-21 and FY 2021-22, Annual Performance Review

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for FY 2022-23 anddetermination of Aggregate Revenue Requirement and

Generation Tariff for FY 2023-24as set out below.
3.2 Norms for Operations

3.2.1 The norms of operation specified under the TERC MYT Regulations, 2015 for
thermal generating stations are as follows:
(a) Normative Annual Plant Availability Factor (NAPAF);

(b) Normative Annual Plant Load Factor (NAPLF) for Incentive;
(c) Auxiliary Energy Consumption (Aux); and
(d) Gross Station Heat Rate (SHR);
3.2.2 The Commission has specified the norms in the TERC MYT Regulations, 2015 and
has approved the operational norms for the respective years considering other
aspects as detailed out in respective Section of this Order. The Petitioner has
submitted the actual performance of their own generation plant viz., Rokhia gas
based thermal power plant (RGTPP), Baramura gas based thermal power plant
(BGTPP) and Gumti Hydro Electric Plant (GHEP)for FY 2020-21 and FY 2021-22.
Any variation in the norms as specified in TERC MYT Regulations 2015 and the
actual parameters are specified in the tariff Order.
3.2.3 Also, the Commission has specified the Norms of Operation till FY 2019-20 in the
TERC MYT Regulations, 2015. Further, the Commission has adopted the similar
norms in Tariff Order dated 2 September, 2022 while approving the ARR for FY
2020-21 to FY 2022-23. With respect to determination of ARR for FY 2023-24, the
similar norms have either been extrapolated or projected considering the extension of
the TERC MYT Regulations, 2015, wherever applicable.
3.2.4 TSECL’s submissions on the performance parameters and the Commission’s
analysis are detailed hereunder.
3.3 Gross Generation and Net Generation

Petitioner’s Submission
3.3.1 TSECL has submitted that itsowns and operates the following three generating
stations viz. RGTPP, BGTPP and GHEP. TSECL in its petition has calculated the
installed capacity based on the average capacity available for the respective year.
The details of the existing stations along with their capacities and dates of
commissioning as submitted by Petitioner, are given in the following Table:
Table 2: Plant wise Effective Capacity
Name of De rated
Capacity Year of
Generation Unit Capacity Status
(MW) Installation
station (MW)
Gumti Hydro- Unit-I 5 5 June 1976 Only 1 unit of 5MW is in

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Name of De rated
Capacity Year of
Generation Unit Capacity Status
(MW) Installation
station (MW)
Electric Project Unit-II 5 February 1977 operation and that to at a
(GHEP) de-rated capacity of 2
Unit -III 5 January 1984 MW
Sub-total 15 5
Unit-IV* 21 21 27th Nov 2002 In operation
Baramura Gas
3rd August
Thermal Power Unit-V* 21 21 In operation
2010
Plant (BGTPP)
Sub-total 42 42
Unit-VII 21 21 24th Sept 2002
Rokhia Gas Unit-VIII 21 21 30th Mar 2006 In operation
Thermal Power
Plant (RGTPP) Unit-IX 21 21 28th Aug 2013
Sub-total 63 63
Total 120.0 110.0
3.3.2 For RGTPP, the Petitioner submitted that PLF of RGTPP is ranging around 63%,
because of the shutdown of the plant due to the periodic maintenance in FY 2020-21.
PLF of RGTPP has dropped from FY 2020-21 as one unit is not operational as per
the directive of Ministry of Environment and Forest (MoEF), due to the pending issue
of clearance of Environmental Clearance of the existing units. The matter is under
process and in FY 2022-23, TPGL has obtained TOR (Terms of Reference) for
conducting the EIA study (Environmental Impact Assessment Study which is also
under advanced stage of completion and approval. As such, TPGL plans to obtain
the pending Environmental Clearance (EC) within next 3-4 months and the shut unit
is planned to be made operational from April’23.Also, one unit of RGTPP was
breakdown/shutdown since April’22 till September 22 impacting the PLF in FY 22-
23.However, the unit has been repaired and the same has been made operational
with effect from first week of October 22 onwards and is expected to be operational
also in the next year.
3.3.3 Further, based on the expected performance, the performance of RGTPP for FY
2022-23 to FY 2023-24 is as provided and PLF of RGTPP to be improved at levels of
70% based on the expected commencement of operation of third unit post
regularization of EC. Also, due to shutdown of one of the units in RGTPP in FY 2022-
23, the plant was operational on the basis of only one unit, which later got functional
from October onwards and hence has considered that RGTPP would be operating all
the three units subject to the availability of gas for full operation of all three units. The
RGTPP unit is expected to be operational with all of its 3 performing units in FY
2023-24 when the final clearance from the Ministry of Environment and Forests, is
expected tobe given for operating all of the three units in FY 23-24, from April ’23
onwards.
3.3.4 For BGTPP, the Petitioner submitted that PLF of BGTPP was much higher than
TERC norms in previous years. But FY 2015-16 onwards, it is in the range of 63% to

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48%. This is because of constraints in gas availability for BGTPP in the last few
years. BGTPP has gas allocations of 0.40 MMSCMD (Million Metric Standard Cubic
Metre per Day), out of which 0.2 MMSCMD is under the Administered Price
Mechanism (APM) gas mechanism and balance 0.2 MMSCMD under the MDP
(Market Determined Price) mechanism. However, of late, GAIL is able to supply gas
only up to 0.30 MMSCMD on an average (75% of allocation) of which the APM quota
shall be exhausted first and the balance shall be under MDP mechanism. As the
huge quantity of gas is required initially only to run the gas turbine, it is not technically
and economically feasible to run the plant at full capacity with this supply. So,
currently BGTPP is able to run only one unit of the plant for most durations resulting
in lower PLF.
3.3.5 In case of GHEP, out of the three units, only two units run based on the annual
average live storage capacity which can generate electricity of 50-60 MUs annually.
As such, GHEP plant can presently generate only 7-8 MW output by running two
units.
3.3.6 The Petitioner submitted that based on the trend of past years and expected
performance, the performance of Generating Plant for FY 2022-23 and FY 2023-24is
projected in the instant petition. The Installed Capacity, Gross Generation, PLFs and
auxiliary consumption for the three generation units for the period FY 2020-21 to FY
2023-24is tabulated as below:
Table 3: Plant-wise own generation for FY 2020-21 to FY 2023-24as submitted by TSECL
Particulars Units FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
Rokhia gas based thermal power
plant (RGTPP)
Gross Generation MU 347.11 334.09 301.99 386.32
Installed Capacity MW 63 63 63 63
PLF % 62.90% 60.54% 54.72% 70.00%
Auxiliary Consumption % 1.00% 1.00% 1.00% 1.00%
Net Generation MU 343.64 330.75 298.97 382.45
Baramura gas based thermal
power plant (BGTPP)
PLF % 52.32% 63.94% 83.98% 85.00%
Gumti Hydro Electric Plant
(GHEP)
PLF % 9.10% 10.72% 12.36% 12.36%

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Commission’s Analysis and Ruling
3.3.7 Regulations 37 & 38 of the TERC MYT Regulations, 2015 specify the operational
norms related to PLF and Auxiliary consumption for the Thermal and Hydro
Generation Power Plant. The actual gross generation for FY 2020-21 and FY 2021-
22 has been considered by the Commission. The actual/projected performance of the
Thermal Generation Plant owned by Petitionervis-à-vis norms specified is outlined in
the following Table.
Table 4: Normative PLF and Aux. Consumption and Actual Performance of Generation
Plant(%)
FY 2020- FY 2021- FY 2022- FY 2023-
Particulars Norms
21 22 23 24
PLF
RGTPP 85 62.90% 60.54% 54.72% 70.00%
BGTPP 85 52.32% 63.94% 83.98% 85.00%
Auxiliary
Consumption
RGTPP 1.00% 1.00% 1.00% 1.00% 1.00%
BGTPP 1.00% 1.00% 1.00% 1.00% 1.00%
Hydro 0.70% 0.70% 0.70% 0.70% 0.70%
3.3.8 With respect to BGTPP, TSECL submitted that though PLF is lower from FY 2015-16
onwards, the same is due to constraints in gas availability for BGTPP. Currently
BGTPP is able to run only one unit of the plant for most durations resulting in lower
PLF.
3.3.9 However, the Commission would like to highlight that mere submission of the fact
that gas constraint is going to affect the availability without any action being
envisaged to factor such risk is not advisable.Based on the improvement in the gas
availability scenario, the PLF of BGTPP has been improved in FY 2021-22 and FY
2022-23, but there has been a drop in generation from FY 2020-21, for which no
explanation has been provided by TSECL. Considering the inconsistency in the gas
availability which is affecting the PLF of the plant, the Commission has considered
the projection of generation as provided by TSECL.
3.3.10 The Commission has verified the actual generation submitted by the Petitioner based
on SLDC certificate issued in this regard. Based on the submission by the Petitioner
after due prudence check, the Commission approves the actual PLF for FY 2020-21
and FY 2021-22and the actual Gross Generation as provided by the Petitioner.
3.3.11 The Commission observes that, since the actual PLF for FY 2020-21 and FY 2021-
22achieved are below the targeted PLF of 85%, TSECL does not qualify for the
incentives for actual generation in excess of ex-bus energy corresponding to target
PLF, as per the norms specified in Regulation 37 of TERC MYT Regulations, 2015.
However, for FY 2022-23 and FY 2023-24, the same will be reviewed by the
Commission at the time of final truing up of the respective years.
3.3.12 Also, the Commission notes that the actual auxiliary consumption is equivalent to the

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normative auxiliary consumption for each year, for which no explanation has been
provided by TSECL. However, the Commission approves the normative / actual
Auxiliary Consumption as per TERC MYT Regulations, 2015, based on the certificate
as provided by SLDC. As per Regulation 10 (IV) of TERC MYT Regulations, 2015,
the Commission has considered the Auxiliary Consumption as a controllable
parameter and hence the same needs to be considered for computing the sharing of
gains in accordance with Regulation 10 (VII) of the TERC MYT Regulations, 2015
and have been dealt in subsequentlyin this Order.
3.3.13 Accordingly, the approved Gross and Net Generation from the own Generating plants
based on the norms as specified in the MYT Regulations 2015, from FY 2020-21 to
FY 2023-24, is outlined in the Table below:
Table 5: Own generation from FY 2020-21 to FY 2023-24approved by the Commission
Rokhia gas based thermal power
plant (RGTPP)
PLF % 62.90% 60.54% 54.72% 70.00%
Baramura gas based thermal
power plant (BGTPP)
PLF % 52.32% 63.94% 83.98% 85.00%
Gumti Hydro Electric Plant
(GHEP)
PLF % 9.10% 10.72% 12.36% 12.36%
3.4 Plant Availability Factor

3.4.1 TSECL has submitted that, the availability factor of RGTPP were higher than 79%
and 95% and for BGTPP was in the range of 54% to 63%%, respectively, during the
true-up period i.e,FY 2020-21 and FY 2021-22. The availability factors for FY 2022-
23 & FY 2023-24 has been increased based on the current improvement in the units
of the plants in BGTPP and fuel supply scenario.
3.4.2 Also, in case of GHEP, out of the three units, only two units run continuously based
on the annual average live storage capacity.

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3.4.3 The availability factors for the FY 2020-21 to FY 2023-24are tabulated as below:
Table 6: Plant wise Availability (%) for FY 2020-21 to FY 2023-24 submitted by TSECL
RGTPP % 79.01% 95.80% 95.00% 95.00%
BGTPP % 54.12% 59.53% 83.98% 85.00%
3.4.4 TSECL further submitted that in the last Tariff Order dated 2 September 2022, the
Commission while allowing the fixed cost for BGTPP has reduced the fixed cost on
pro-rata basis on the basis of actual Plant Availability Factor as compared to the
Normative Plant Availability Factor of 85%. In this context, TSECL submitted that the
availability of BGTPP is constrained because of the uncontrollable factor of
availability of gas for the power plant. The plant is not able to schedule/be available
for one of its units (out of two units) due to constraints in availability of gas which has
been elaborated in the Petition.
3.4.5 TERC MYT Regulations 2015 also allows for relaxation of NAPAF targets due to
unavailability of fuel/gas since this is an uncontrollable factor. The Commission has
ignored Regulation 37 of TERC MYT Regulations 2015, which clearly states that the
NAPAF shall be reviewed in case of constraints in availability of gas.
3.4.6 The Commission in its previous Tariff Order dated 1 September 2020 had also
considered the lower Availability Factor of BGTPP due to constraints in availability of
gas and had not reduced the fixed charges. As such, the reduction in AFC as done in
the impugned order is in contradiction with the own past orders of the Commission as
well as the TERC MYT regulations 2015. The non reduction of AFC due to
uncontrollable factor of gas availability would increase the gap by Rs. 16 crores.
3.4.7 As per Regulation 32 of the TERC MYT Regulations, 2015, Full Fixed Cost of
Thermal Generating Station can be recovered only if the actual Availability is equal to
or higher than the Normative Plant availability factor of 85% as specified in
Regulations 37 of the TERC MYT Regulations, 2015.
3.4.8 With regards to Hydro Plant also, as per Regulations 33 of the TERC MYT
Regulations 2015, Capacity Charges is calculated on a pro-rata basis of actual Plant
Availability factor with the Normative Plant Availability factor of 85% as specified in
Regulations 38 of the TERC MYT Regulations, 2015.
3.4.9 The Petitioner submitted the actual PAF for FY 2020-21 and FY 2021-22and
projected PAF for FY 2022-23 and FY 2023-24. It was noticed that availability is
higher than normative Plant availability factor of 85% for RGTPP and lower for
BGTPP.However, TSECL has not provided any details related to PAF of GHEP in the
petition as well as to the replies to the data gaps.
3.4.10 The Commission has noted the submission made by the Petitioner with regards to
constraint in gas availability for BGTPP and limited live storage capacity of water for

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GHEP.With regards to FY 2022-23 and FY 2023-24, considering the improved

condition of gas supply, the Commission has considered the normative Plant
availability factor of 85% for all the generating plants.
3.4.11 Accordingly, the Commission approves the actual availability as specified by the
Petitioner for FY 2020-21 and FY 2021-22and normative availability for FY 2022-23
and FY 2023-24 as shown in the following Table:
Table 7: Plant wise Availability (%) for FY 2020-21 to FY 2023-24approved by the Commission
Norm FY 2020- FY 2021- FY 2022- FY 2023-
Particulars Units
21 22 23 24
RGTPP % 85.00% 79.01% 95.80% 85.00% 85.00%
BGTPP % 85.00% 54.12% 63.94% 85.00% 85.00%
3.4.12 Since the actual availability is higher than normative availability for RGTPP, the
Commission allows the recovery of entire trued up fixed charges for FY 2020-21 and
FY 2021-22as determined in subsequent sections of this Order. However, with
reference to BGTPP, it has been noticed that actual availability is lower than the
normative availability as specified in the TERC MYT Regulations 2015. Accordingly,
the recovery of fixed charges on truing-up for FY 2020-21 and FY 2021-22is
approved on pro-rata basis as specified in Regulations 37 of TERC MYT
Regulations, 2015, and the same is determined in the subsequent sections of this
Order. For GHEP, TSECL has not provided any details of PAF and therefore
Commission directs TSECL to provide the PAF as certified by the SLDC for all the
three plants in the next tariff petition on the basis of which the treatment of fixed
charges will be decided for GHEP Plant.
3.4.13 With respect to FY 2022-23 and FY 2023-24, the Commission shall consider the
treatment of recovery of fixed charges as specified in Regulations 37 and 38 of
TERC MYT Regulations, 2015 as per the actual Availability at the time of final Truing-
up of ARR for the respective years.
3.5 Station Heat Rate

3.5.1 TSECL has submitted that Station Heat rate of a thermal power plant is a measure of
the power plant’s energy efficiency and Station Heat Rate calculated for RGTPP and
BGTPP is based on the net calorific values (kcal/Standard Cubic Meter) of the gas
being supplied to power plants.
3.5.2 For 2020-21, the actual SHR of BGTPP has dipped compared to previous 3 years,
i.e. to 3460 kcal/kWh, as per TERC MYT Tariff petition 2020. For RGTPP, the
average heat rate is close to the normative value of 3700 kCal/kWh. For FY 2021-22,
actual SHR of both the plants of RGTPPP and BGTPP is slightly less than the
normative values approved by the Commission thereby resulting in savings in fuel

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cost. Further, SHR for FY 2022-23 & FY 2023-24 has been kept same based on the
latest performance of FY 22 (upto March 22), which is expected to continue.
3.5.3 The SHR of BGTPP and RGTPP as submitted by Petitioner for FY 2020-21 to FY
2023-24is highlighted as below:
Table 8: SHR for FY 2020-21 to FY 2023-24(kCal/ kWh)
FY 2020- FY 2021- FY 2022- FY 2023-
Particulars Units
21 22 23 24
RGTPP kcal/kWh 3,459.68 3,550.40 3,550.40 3,550.40
BGTPP kcal/kWh 3,702.40 3,696.51 3,696.51 3,696.51
3.5.4 As per Regulations 37 (C) (4) of TERC MYT Regulations 2015, the normative SHR
considered for RGTPP and BGTPP is 3700 kCal/kWh.
3.5.5 The Commission observes that though the actual SHR as submitted by Petitioner are
well within the norms except for BGTPP for FY 2020-21. For the purpose of Truing
up for FY 2020-21 and FY 2021-22, the Commission has considered the actual SHR.
For FY 2022-23 and FY 2023-24, the Commission approves the normative SHR of
3700 kcal/kWh.
3.5.6 Accordingly, the Commission approves the normative Station Heat Rate as per MYT
Regulations 2015 for FY 2020-21 to FY 2023-24.
Table 9: Approved SHR (kCal/kWh)
FY 2020- FY 2021- FY 2022- FY 2023-
Particulars Units
21 22 23 24
Actual
RGTPP kcal/kWh 3,459.68 3,550.40 3700.00 3700.00
BGTPP kcal/kWh 3,702.40 3,696.51 3700.00 3700.00
Normative
RGTPP kcal/kWh 3700.00 3700.00 3700.00 3700.00
BGTPP kcal/kWh 3700.00 3700.00 3700.00 3700.00
3.5.7 The Commission would like to state that as per Regulation 10 (IV) of TERC MYT
Regulations, 2015, the Commission has considered the Station Heat Rate as a
controllable parameter and hence the difference between the actual SHR and
normative SHR as outlined in the above table for the respective years for FY 2020-21
and FY 2021-22will be considered for computing the sharing of financial gains in
accordance with Regulation 10 (VII) of TERC MYT Regulations, 2015 and have been
dealt in subsequent section of this Order. With regards to the submission made by
TSECL, it is submitted that while approving the Fuel cost, the Commission has
calculated the normative fuel cost considering the normative performance parameter
such as SHR and Auxiliary consumption, while determining the ARR. Accordingly,
the difference between the actual fuel cost and normative fuel cost, if resulting in

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gain, is shared with the consumers as per Regulation 10 (VII) of TERC MYT
Regulations, 2015.
3.5.8 Accordingly, the Commission hasconsidered the sharing of Financial gains in
accordance with Regulation 10 (IV) and (VII) of TERC MYT Regulations, 2015, in
subsequent Section of this Chapter.
3.6 Fuel Purchase Cost

3.6.1 The Petitioner has submitted that the only fuel used for self-generation of energy at
RGTPP and BGTPP is natural gas which is being sourced from the reserves at
RGTPP, BGTPP and Konaban partly under the Administrative Price Mechanism
(APM) at the rates notified by the Ministry of Petroleum and Natural Gas (MoP&NG),
Government of India and partly at the Market Determined Price (MDP). Accordingly,
Petitioner has made allocations of 0.58 MMSCMD and 0.40 MMSCMD under the
APM gas mechanism for its generation plants at RGTPP and BGTPP respectively.
3.6.2 Further Petitioner submitted that currently, GAIL is able to supply only 0.50
MMSCMD (86% of allocation) and 0.30 MMSCMD (75% of allocation) under APM
gas mechanism to RGTPP and BGTPP respectively and balance requirement is
sourced under MDP (Market Determined Price). For FY 2023-24, all the units of
RGTPP and BGTPP are expected to be operational. Accordingly, source wise (APM
and MDP) supply of gas of FY 2020-21 to FY 2023-24 is given in the following Table:
Table 10: Source wise Supply of Fuel and cost (per SCM) - FY 2020-21 to FY 2023-24
Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
RGTPP BGTPP RGTPP BGTPP RGTPP BGTPP RGTPP BGTPP
Source wise supply of Natural Gas (In %)
APM supply
97.55% 90.79% 97.89% 68.87% 100.00% 54.16% 100.00% 54.16%
from GAIL
MDP Supply
2.44% 9.21% 2.11% 31.13% 0.00% 45.83% 0.00% 45.8
from ONGC
Fuel Cost (Rs./SCM)
APM Supply 5.57 4.33 5.98 5.06 19.62 19.45 19.62 19.45
MDP Supply 9.24 12.09 9.7 9.73 0 10.14 10.14 10.14
3.6.3 The Petitioner submitted the actual Fuel cost for FY 2020-21 and FY 2021-22 for the
purpose of truing up.
3.6.4 As per Clause 25 of TERC MYT Regulations, 2015, the landed fuel cost of primary
fuel and secondary fuel for tariff determination shall be projected based on actual
weighted average cost of primary fuel of last three months. This fuel cost includes
other costs like metering charges, Vat payable, etc. The projected fuel cost for FY
2022-23 and FY 2023-24 based on the latest applicable rates of fuel for October’22
and November’22.
3.6.5 The Petitioner submitted that APM prices notified by MoPNG, GoI during the control
period is tabulated below. From April’22 there has been a sudden increase in the

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price of raw APM gas prices as notified by MoPNG, GoI, where it has increased
drastically around 110% to USD 6.1/MMBtu from April 22, from its previous value of
USD 2.9/MMBtu, which was applicable in October 21-March22. The Gas prices have
further increased to USD 8.57/MMBtu from 1st October 22 onwards for the October
22-March 23 period, as per MoPNG notification dated 30 September, 2022 which is
an additional increase of more than 40%. In addition to the increase in raw APM gas
price as per Govt notification, there is an additional impact on change in USD to INR
exchange rate and increase in other charges like transportation, VAT etc. The
Petitioner has projected the fuel cost based on the latest rate as notified and effective
from October 22 for the remaining period of FY 2022-23 and for FY 2023-24. It has
already received a fuel bill based on the escalated rates for the first fortnight of
October 22. This is expected to increase the overall costs of TSECL by more than
Rs. 250 Crore in the current year from the previous year considering the latest gas
price increase from the second half of FY 2022-23.The Commission is requested to
take a note of the same and accordingly compute the ARR of TPGL and pass this
impact as the base tariff revision for the current year in order to prevent accumulation
of gap and resultant carrying cost.
Table 11: Details of APM Gas price notified by MoPNG, GoI
Gas
Period Price
(US$)
April 2017 - Sept 2017 2.48
Oct 2017 - Mar 2018 2.89
April 2018 - Sept 2018 3.06
Oct 2018 - Mar 2019 3.36
April 2019 - Sept 2019 3.69
Sept 2019 - Mar 2020 3.23
April 2020 - Sept 2020 2.39
Sept 2020 - Mar 2021 1.79
April 2021 - Sept 2021 1.79
Sept 2021 - Mar 2022 2.90
April 2022 - Sept 2022 6.10
Oct 2022-March 2023 8.57
3.6.6 The Petitioner further submitted that latest foreign currency depreciation of Indian
rupees in foreign exchanges has taken a major impact in the gas purchases in Indian
currency. The USD rate in Indian currency has fluctuated from 75 INR to 78 INR from
April to June’22 but then increased drastically to 80 INR and at present 82 INR (as of
December 22) respectively. Such volatility in Indian rupee has taken a big impact in
the Gas prices and is expected to be volatile in the next FY 2023-24 as well as the
supply of natural gas has been still very low from international markets and prices
have increasedby over 150% in the last six months. Hence, the Petitioner requested
to consider the tariff revision in this petition caused by the above factors which have

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hampered substantially the generation cost of TSECL/TPGL and would further

impact their operations.
3.6.7 Based on the aforesaid, TPGCL has claimed the Plant wise fuel consumption and
fuel cost as tabled below:
Table 12: Fuel consumption and Fuel Cost as per TSECL (Rs. Crore)
FY 2020- FY 2021- FY 2022- FY 2023-
Particulars Units
21 22 23 24
RGTPP
Fuel Consumption MMSCM 154.11 148.76 134.47 172.02
Fuel Cost Rs. Crore 87.45 91.46 235.74 337.59
BGTPP
3.6.8 The Commission sought the reconciliation of fuel cost claimed in the Petition vis-à-vis
audited accounts for FY 2020-21 and FY 2021-22. The Commission observed that
the fuel consumption details provided agency wise reconciles with the total quantum
of gas purchased as provided by the Petitioner in the petition. However, the
Commission has also tried to reconcile the cost with the amount as highlighted in the
audited annual accounts of FY 2020-21 and FY 2021-22which is outlined as below:
Table 13: Reconciliation of Fuel Cost (Rs. Crore)
Particulars Units FY 2020-21 FY 2021-22
RGTPP Rs. Crs 87.45 91.46
BGTPP Rs. Crs 41.02 67.04
Total Fuel Cost as per petition Rs. Crs 128.47 158.50
Fuel Cost as per Audited Accounts
Natural Gas Rs. Crs 128.43 158.46
HSD Cost Rs. Crs 0.04 0.04
Total Fuel Cost as per Accounts Rs. Crs 128.47 158.50
3.6.9 In view of the above, the Commission approves the cost of Natural gas and HSD cost
as per audited annual accounts of FY 2020-21 and FY 2021-22 for the purpose of
truing up.
3.6.10 With respect to FY 2022-23 and FY 2023-24, the Commission has computed the Gas
consumption and the Fuel Cost based on the normative operational parameter as
specified in the MYT Regulations 2015 and as specified in the above relevant para of
this order, subject to prudence check at the time of true-up.
3.6.11 As regards the Fuel price for FY 2022-23 and FY 2023-24, the Commission has
noted the submission of the Petitioner regarding the increasing prices for gas.
Further, the Commission sought the latest fuel cost purchase bills for verification of
actual increase in the price of fuel. The Petitioner, in reply to query of the
Commission, submitted the latest fuel bills for the period from April 1 to April 15 of

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current year i.e., FY 2023-24 for both stations viz. RGTPP and BGTPP. The following
fuel prices have been observed from the bills:
(a) For RGTPP, the average price of purchased fuel works out as Rs. 12,288.77/
SCM for purchase of 214,472 MMBTU of gas.
(b) For BGTPP, the average price of purchased fuel works out as Rs. 12,224.71/
SCM for purchase of 108,622 MMBTU of gas.
3.6.12 The above said prices reflects the latest prices as per market and purchase of the
Petitioner. Hence, it would be appropriate for consideration of these prices for
computation of fuel cost for FY 2022-23 and FY 2023-24 in order to rationalise the
impact of fuel prices. In view of this, the Commission after exercising its power has
considered above said fuel prices for determination of fuel cost for FY 2022-23 and
FY 2023-24. The actual fuel cost based on actual fuel prices shall be considered at
time of truing up for respective years, subject to prudence check.
3.6.13 Based on the approach adopted for FY 2021-22and FY 2022-23, the Commission
has recomputed the Fuel Cost based on the normative parameter for RGTPP and
BGTPP and is outlined in the Table below:

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Table 14:Fuel Purchase Cost of RGTPP for FY 2020-21 to FY 2022-23 as approved by the Commission
Particulars Units FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
Petitioners Submission Approved by Commission
Installed Capacity MW 63.00 63.00 63.00 63.00 63.00 63.00 63.00 63.00
Days Nos. 365.00 365.00 365.00 365.00 365.00 365.00 365.00 365.00
PLF % 62.90% 60.54% 54.72% 70.00% 62.90% 60.54% 54.72% 70.00%
Gross Generation MU 347.11 334.09 301.99 386.32 347.11 334.09 301.99 386.32
Auxiliary Consumption % 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Net Generation MU 343.64 330.75 298.97 382.45 343.64 330.75 298.97 382.45
Heat Rate* kcal/kWh 3,702.50 3,699.83 3,709.39 3,709.39 3,700.00 3,700.00 3,700.00 3,700.00
GCV of gas kcal/SCM 8,339.21 8,309.11 8,330.34 8,330.34 8,339.21 8,309.11 8,330.34 8,330.34
Overall Heat G. cal. 1,285,192 1,236,063 1,120,184 1,432,997 1,284,324 1,236,133 1,117,348 1,429,369
Gas consumption M. SCM 154.11 148.76 134.47 172.02 154.01 148.77 134.13 171.59
Price of Gas Rs./1000 SCM 5,674.36 6,148.16 17,531.06 19,624.84 5,674.36 6,148.16 12,288.77 12,288.77
Total Normative cost of Gas Rs. Crore 87.45 91.46 235.74 337.59 87.39 91.47 164.83 210.86
Table 15: Fuel Purchase Cost of BGTPP for FY 2020-21 and FY 2022-23approved by the Commission
Particulars Units FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
Petitioners Submission Approved by Commission
Installed Capacity MW 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00
Days Nos. 365.00 365.00 365.00 365.00 365.00 365.00 365.00 365.00
PLF % 52.32% 63.94% 83.98% 85.00% 52.32% 63.94% 83.98% 85.00%
Gross Generation MU 192.50 235.25 308.98 312.73 192.50 235.25 308.98 312.73
Auxiliary Consumption % 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Net Generation MU 190.57 232.90 305.89 309.60 190.57 232.90 305.89 309.60
Heat Rate* kcal/kWh 3,459.95 3,552.22 3,544.18 3,544.18 3,700.00 3,700.00 3,700.00 3,700.00
GCV of gas kcal/SCM 8,261.86 8,293.56 8275.11 8275.11 8,261.86 8,293.56 8,275.11 8,275.11
Overall Heat G. cal. 666,022 835,659 1,095,073 1,108,378 712,232 870,425 1,143,219 1,157,108
Gas consumption M. SCM 80.61 100.76 132.33 133.94 86.21 104.95 138.15 139.83
Price of Gas Rs./1000 SCM 5,088.44 6,653.43 13,176.55 13,176.55 5,088.44 6,653.43 12,224.71 12,224.71
Total Normative cost of Gas Rs. Crore 41.02 67.04 178.34 203.37 43.87 69.83 168.89 170.94
Tariff Order for TSECL for FY 2023-24 Page 47 of 151

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3.6.14 Accordingly, the Commission approves the Fuel Cost for FY 2020-21 to FY 2023-
24as outlined in the following Table:
Table 16: Fuel Cost for FY 2020-21 to FY 2023-24approved by the Commission
FY 2020- FY 2021- FY 2022- FY 2023-
Particulars Units
21 22 23 24
RGTPP
BGTPP
3.7 Annual fixed charges (AFC)

3.7.1 Regulation 23 of the TERC MYT Regulations, 2015 specifies the components of
Annual Fixed Charges as follows:
a. Return on equity;
b. Interest on loan capital;
c. Depreciation;
d. Interest on working capital;
e. Operation and maintenance expenses;
f. Recovery of fee for tariff petition filing; and
g. Minus Non-tariff income
Provided that special allowance in lieu of R&M where opted in accordance to
Clause18 and/or separate compensation allowance in accordance to Clause19,
wherever applicable shall be recovered separately and shall not be considered
for computation of working capital.
3.8 Operation & Maintenance Expenses

3.8.1 TSECL submitted that, as per Regulation 31 (1) (b) of TERC MYT Regulations, 2015,
Operation and Maintenance (O&M) expenses of RGTPP and BGTPP has been
calculated based on the normative cost per MW of capacity and for Hydro Generating
stations, O&M cost is calculated by escalating O&M cost of previous year by 6.64%.
3.8.2 The details of the norms of the O&M Expenses for RGTPP and BGTPP are as
provided below:
Table 17: Norms for calculation of O&M expenses for Generating Station
Particulars Amount (Rs. Lakh per MW)
FY 2020-21 69.08
FY 2021-22 73.77
FY 2022-23 78.78
FY 2023-24 84.13
3.8.3 Further, though the actual O&M cost for FY 2020-21 and FY 2021-22are as per the

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audited accounts, it has been segregated between Generation, Transmission and

Distribution function, TPGL has claimed O&M expenses based on actual expenses in
the tariff petition.
3.8.4 TSECL has submitted that the actual Operation & Maintenance (O&M) expenses is
very less than the approved O&M expenses considered in the Tariff order as per the
normative cost principle taken previously in our tariff petitions. This is because of
reduced manpower at present in TPGL and limited maintenance being carried out at
present due to the limitations in the funds. In future, TPGL intends to increase the
manpower and also adopt best practices for maintenance required for improving
efficiency and age of the plant. As such, TPGL requests the Commission to allow
higher O&M costs in future and not take the present actual cost as a base cost for
future projections, to maintain the desired efficiency.
3.8.5 TSECL further submitted that the total employee cost has been projected based on
an assumption of normative average 5% increase minimum in employee wages, a
12% additional Dearness Allowance (DA) hike in Employee expenses from 1st
Dec’22 onwards as announced by the Govt. of Tripura and there would be change in
the number of manpower in the next two years in FY 2022-23 and 2023-24. The no.
of employees expected to be retired by end of FY 2022-23 is around 8, compared to
the expected no. of recruitment, which is 6. For FY 2023-24, the no. of employees
expected to be retired is around 13. Further, 90 number of employees are expected
to be recruited by FY 2023-24 which has already been approved and the recruitment
process has been initiated. This requirement of manpower is due to the urgent need
of personnel for operation of the substations under various divisions of TSECL. As of
now there has been no consideration of pay revision in FY 2022-23 and 2023-24
from TSECL, hence the same has not been considered in employee expenses.
3.8.6 TSECL further submitted that actual O&M cost of each plants of TSECL booked in
account statements of previous years are currently much less as compared to
normative O&M cost. This is because the cost of periodic planned maintenance like
CIBI, Major Inspection etc. is not being booked under R&M works but are booked as
Capex and other R&M activities undertaken under disaster management is also not
booked under R&M expenses resulting in understatement of R&M expenses in
accounts.
3.8.7 The O&M expenses as claimed is outlined in the table below:
Table 18: O&M Expenses claimed by Petitioner (Rs. Crore)
RGTPP
Employee Cost 4.21 4.07 4.42 5.20
R&M Expenses 0.71 0.68 0.68 0.68
A&G Expenses 1.10 1.38 1.74 1.91
Total 6.02 6.13 6.83 7.78
BGTPP
Employee Cost 3.02 2.62 2.83 3.33

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R&M Expenses 2.00 2.42 2.42 2.66
A&G Expenses 1.57 1.50 1.50 1.50
Total 6.59 6.54 6.75 7.49
GHEP
Employee Cost 2.94 2.88 3.13 3.68
R&M Expenses 0.15 0.78 0.78 0.86
A&G Expenses 0.37 0.54 0.54 0.59
Total 3.46 4.20 4.45 5.13
3.8.8 Regulations 31 (I)(b) of TERC MYT Regulations, 2015 specifies the norms for
calculation of O&M Expenses of gas based generating plant as stated below:
“31. Operation and Maintenance Expenses:
I. Normative Operation and Maintenance expenses of thermal generating
station shall be as follows:
b. Open Cycle Gas Turbine/Combined Cycle generating stations:
Gas Turbine/ Baramura Gas
Small gas
Combined Cycle Thermal Project
turbine Advance
Generating stations and Rokhia Gas
Year power F Class
other than small Thermal Project
generating Machines
gas turbine power (below 25MW
stations
generating stations units)
FY 2015-16 15.59 35.70 44.14 28.36
FY 2016-17 16.57 38.13 47.14 30.29
FY 2017-18 17.61 40.73 50.35 32.35
FY 2018-19 18.72 43.50 53.78 34.56
FY 2019-20 19.90 46.46 57.44 36.91
3.8.9 Regulations 31 (III) of TERC MYT Regulations, 2015 specifies the norms for
calculation of O&M expenses of Hydro based generating plant as stated below:
“III. Hydro Generating Station
a. Following operations and maintenance expense norms shall be applicable
for hydro generating stations (in Rs lakh)
i. The operation and maintenance expenses shall be derived on the
basis of actual operation and maintenance expenses for the years
2009-10 to 2013-14, based on the audited balance sheets, excluding
abnormal operation and maintenance expenses, if any, after prudence
check by the Commission.
ii. The normalized operation and maintenance expenses after prudence
check, for the years 2009-10 to 2013-14, shall be escalated at the rate
of 6.04% to arrive at the normalized operation and maintenance
expenses at the 2013-14 price level respectively and then averaged to
arrive at normalized average operation and maintenance expenses for
the 2009-10 to 2013-14 at 2013-14 price level. The average
normalized operation and maintenance expenses at 2013-14 price
level shall be escalated at the rate of 6.64% to arrive at the operation
and maintenance expenses for year 2014-15 and thereafter escalated
at the rate of 6.64% p.a., to arrive at the O&M expenses for the control
period.”

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3.8.10 As stated above, Regulation 31 of the TERC MYT Regulations, 2015 specifies the
methodology for determination of normative O&M expenses for thermal and Hydro
based Generating Stations. Regulation 31 (I) specifies the normative O&M expenses
in Rs. lakh/MW for the gas-based thermal Generating Stations and Regulation 31 (III)
specifies the methodology for determining the normative O&M expenses for existing
Hydro Generating Stations.
3.8.11 With regards to the O&M norms of Gas based Power Plant, the Commission has
observed that the norms in the TERC MYT Regulations 2015 is till the period FY
2019-20 and therefore, in Tariff Order dated 2 September 2022, the Commission has
projected the O&M expenses for FY 2020-21 on a pro-rata basis considering the
similar escalation factor as considered for FY 2015-16 to FY 2019-20 and
accordingly, the derived O&M escalation rate for the gas based Power Plant is 6.81%
which is considered for projection of O&M norms for FY 2020-21 to FY 2023-24.
3.8.12 With regards to the O&M norms of Hydro based Power Plant, though as per the
Regulations, it is specified that an average O&M expenses of FY 2009-10 to FY
2013-14 is required to be considered and to be escalated at the rate as specified in
the TERC MYT Regulations 2015 to derive the O&M expenses for FY 2014-15 and
which will be further escalated @6.64% p.a. to arrive at the O&M expenses for the
control period.
3.8.13 The similar approach as considered in last Tariff Order dated 2 September, 2022 has
been considered by the Commission in the current tariff order, whereby the
escalation norm of 6.64% p.a. has been considered on the normative O&M cost of
GHEP as approved in the last tariff order to determine the normative O&M cost for
FY 2020-21 to FY 2023-24.
3.8.14 Accordingly, the normative O&M cost as approved by the Commission for FY 2020-
21 and FY 2023-24is outlined in the Table below:
Table 19: Normative O&M Cost for FY 2020-21 and FY 2023-24approved by the Commission
(Rs. Crore)
Norms - O&M Expenses Rs. Lakh/MW 61.35 65.52 69.98 74.73
RGTPP
Effective Capacity MW 63 63 63 63
O&M Expenses of RGTPP Rs. Crore 38.65 41.28 44.09 47.08
BGTPP
Effective Capacity MW 42 42 42 42
O&M Expenses of BGTPP Rs. Crore 25.77 27.52 29.39 31.39
GHEP
O&M Expenses of GHEP Rs. Crore 3.42 3.65 3.89 4.15
Total normative O&M cost Rs. Crore 67.84 72.45 77.37 82.62

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3.8.15 Also, the Audited Annual Accounts of TSECL for FY 2020-21 and FY 2021-22, as
provided by the Petitioner, is a consolidated financial statement of Generation,
Transmission and Distribution Function and is yet to be disaggregated function wise.
The notification of the transfer scheme providing segregation of assets and liabilities
to the successor entities is still pending as on date and therefore, all the financial
transaction related to Generation, Transmission and Distribution Function is
accounted in the books of TSECL. The Petitioner in replies to data gaps has
submitted that the asset transfer has not taken place from TSECL to the newly
incorporated company-TPGL. The financial segregation is still in progress and only
the administrative segregation has been completed.
3.8.16 Accordingly, the Petitioner has submitted the actual allocation of O&M cost for
Generation, Transmission and Distribution function, wherever necessary for ARR and
making suitable assumptions, as necessary, for the common functions like accounts
and finance, HR, projects etc. at corporate level.
3.8.17 The Commission has reconciled the function-wise O&M cost as provided by the
Petitioner with the consolidated audited annual accounts. The reconciliation carried
out by the Commission is outlined as below:
Table 20: Reconciliation of O&M function-wise with Audited Accounts (Rs. Crore)
Particulars FY 2020-21 FY 2021-22
O&M Expenses as per audited accounts 242.40 246.89
O&M expenses - Function wise
RGTPP 6.02 6.13
BGTPP 6.59 6.54
GHEP 3.46 4.20
Generation Function 16.07 16.87
Transmission Function 23.43 38.46
Distribution Function 202.90 191.56
Total O&M Expenses as per Petitioner 242.40 246.89
3.8.18 The Commission observes that the actual O&M expenses for Generation Function
are lower than the normative O&M expenses as specified in Regulations 31 (1) (b) of
TERC MYT Regulations, 2015. The Commission would like to highlight that the O&M
norms as specified in the Regulations, is the ceiling cost which the Commission can
allow and since the actual cost is lower than the normative cost, the Commission at
present approves the O&M expenses in line with the audited annual accounts for FY
2020-21 and FY 2021-22.
3.8.19 As regards the O&M Expenses for FY 2022-23, the Commission observed that actual
expenses incurred by the Petition for first half of the said year is far lower than
normative O&M expenses approved by the Commission for RGTPP and BGTPP.
The Commission does not incline to approve normative O&M expenses for both
Stations and then approve the actual O&M expenses during truing up Petition next
year wherein actual expenses incurred would be much lower than normative

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expenses. Hence, in order to reduce the excess burden on consumer, the

Commission approves the O&M Expenses for FY 2022-23 for RGTPP and BGTPP
as submitted by the Petitioner.
3.8.20 However, for FY 2023-24, the normative O&M cost has been considered as per
TERC MYT Regulations, 2015 for the determination of Aggregate Revenue
Requirement for Generation function and the actual expenseswill be consideredat the
time of the truing-up of the respective years as per the principle adopted by the
Commission for previous years.
3.8.21 The O&M expenses as approved by the Commission for determination of ARR for FY
2020-21 to FY 2023-24are outlined in the table below:
Table 21: O&M expenses for FY 2020-21 to FY 2023-24 as approved by the Commission (Rs.
Crore)
Plant wise FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
RGTPP 6.02 6.13 6.83 47.08
BGTPP 6.59 6.54 6.75 31.39
GHEP 3.42 3.65 3.89 4.15
O&M Expenses 16.03 16.32 17.47 82.62
3.9 Depreciation
3.9.1 TSECL has considered the depreciation rates as per MYT Tariff Regulations, 2015
on the gross asset value. The Petitioner submitted that in account statement
provided for FY 2020-21 and FY 2021-22, the depreciation has been calculated as
per depreciation rate provided in Companies Act 2013 i.e., based on the useful life.
Accordingly, the rate of depreciation considered by Petitioner for calculation of
Depreciation is as provided below:
Table 22: Rate of Depreciation as per Tariff Regulations
Particulars Depreciation Rate
Land 0.00%
Building 3.34%
Plant & Machinery 5.28%
Computer 15.00%
Computer and Office Equipment 15.00%
Office Equipment 6.33%
Furniture 6.33%
Vehicles 9.50%
3.9.2 In its reply to the data gaps raised by the Commission, TSECL has submitted the
actual value of the gross value of assets and the asset base for calculation of
depreciation. Further it has submitted that the book value of assets is based on the
original gross value and no revaluation has been done for the value of assets.
3.9.3 With regards to the capitalisation, the Petitioner, in its reply to the data gaps has
submitted the actual capitalisation for FY 2020-21 and FY 2021-22and in order to
project the value of assets for FY 2020-21 to FY 2022-23, the total capitalisation
expected to be incurred in these years is projected based on the trend of actual

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addition of assets in the past few years.

3.9.4 The actual value of the Gross Fixed Assets for FY 2020-21 and FY 2021-22 and
projection for FY 2022-23 and FY 2023-24alongwith the depreciation claimed by the
Petitioner is outlined in the table below:
Table 23: Gross Value of Assets and Depreciation claimed for FY 2020-21 to FY 2023-24(Rs.
Crore)
Rokhia gas based thermal power plant (RGTPP)
Opening GFA 280.29 273.86 274.84 274.84
Addition during the year (6.43) 0.98 - -
Closing GFA 273.86 274.84 274.84 274.84
Depreciation 6.39 5.18 5.18 5.18
Avg. Dep. Rate 2.31% 1.89% 1.89% 1.89%
Baramura gas based thermal power plant (BGTPP)
Opening GFA 179.39 215.68 223.05 223.05
Addition during the year 36.29 7.37 - -
Closing GFA 215.68 223.05 223.05 223.05
Depreciation 4.42 5.93 5.93 5.93
Avg. Dep. Rate 2.24% 2.70% 2.66% 2.66%
Gumti Hydro Electric Plant (GHEP)
Opening GFA 16.57 15.14 15.14 15.14
Addition during the year (1.43) - - -
Closing GFA 15.14 15.14 15.14 15.14
Depreciation 0.66 0.68 0.68 0.68
Avg. Dep. Rate 4.19% 4.49% 4.49% 4.49%
Total Depreciation 11.48 11.79 11.79 11.79
3.9.5 Regulations 29 of TERC MYT Regulations, 2015, provide the basis of which the
Petitioner can claim the depreciation and is specified as follows:
V.Depreciation shall be calculated annually based on Straight Line Method and at

rates specified in Annexure-8 of these regulations for the assets of the
generating station and transmission/distribution system…………………
(Emphasis Added)
VI. Depreciation shall not be allowed on assets funded by consumer contribution

(i.e., any receipts from consumers that are not treated as revenue) and capital
subsidies/ grants.
3.9.6 The above Regulations clearly provide for allowance of depreciation on assets on
Straight Line Method and at the rates as specified in TERC MYT Regulations, 2015.
Also, no depreciation shall be allowed on assets funded by Consumer Contribution or
Capital Subsidies / Grant.
3.9.7 As per the significant Accounting policies as specified in the audited accounts, it has
been specified that depreciation is calculated based on their useful life and

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considering the date of use. Also, with regards to the Grants, the audit report also
specifies that the same is included as deferred income and are credited to the Profit
& Loss account on a systematic basis over the expected lives of assets and
presented within the income. Accordingly, the depreciation on assets funded by grant
is considered as income and is adjusted within the profit & loss account.
3.9.8 Also, as per the data provided by the Petitioner, the actual capitalisation during FY
2020-21 and FY 2021-22, is provided in the table below, whereby the Petitioner has
not submitted any documentary evidence regarding the actual capitalisation of
assets that have been actually put to use. Further, it is noted that the Petitioner
has not projected any capitalisation for FY 2022-23 and FY 2023-24.
Table 24: Capitalisation of Assets of Generation business – Petitioner (Rs. Crore)
RGTPP (6.43) 0.98 - -
BGTPP 36.29 7.37 - -
GHEP (1.43) - - -
Total Capitalisation 28.43 8.35 - -
3.9.9 The Commission observed that the amount of capitalisation is very abnormal with no
consistency and no explanation has been provided by the Petitioner for
decapitalisation and capitalisation of assets for FY 2020-21 and FY 2021-22.
Therefore, it is necessary to analyse the scheme wise details alongwith the spill over
of the CAPEX and its capitalisation. Accordingly, the Commission directs the
Petitioner to provide the scheme wise details of CAPEX, Capitalisation and
justification for any delay in commissioning of the asset in next tariff Petition.
3.9.10 However, considering the minor capitalisation amount undertaken by the Petitioner,
the Commission approved the additional capitalisation and decapitalisation of assets
as proposed by the Petitioner.However, the Commission directs the Petitioner to
provide the documentary evidence of capitalisation in its future submission on
tariff filing for consideration.
3.9.11 Considering the above capital expenditure plan envisaged to be undertaken, the
Commission is of the view that as per TERC MYT Regulations, 2015, a capital
investment plan is required to be submitted to the Commission for approval
highlighting the following year wise details:
a) On-going projects that will spill into the control period under review
b) New projects that will commence within the control period and will be completed
within the control period
c) New projects that will commence within the control period but may be completed
within or beyond the control period.
d) Relevant commercial and technical details along with cost benefit analysis for
each of the major item proposed under capital investment plan.
3.9.12 However, the Petitioner has not provided any details as specified in the Regulations

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and accordingly, the Commission directs Petitioner to submit the capital investment
plan at the earliest providing the details as specified above within 6 months of the
issue of this tariff order.
3.9.13 It is observed that despite several directions from the Commission in this regard, the
Petitioner has not complied with the Commission’s directive regarding submission of
Fixed Assets Register. As detailed in previous Orders, due to the absence of the
Fixed Assets and Depreciation register, it is difficult for the Commission to ascertain
the GFA value of the Petitioner. However, considering the audited account statement
which also follows the Straight Line Method for calculation of depreciation, the
Commission in absence of Fixed Assets Register, approves the depreciation in line
with the audited accounts for FY 2020-21 and FY 2021-22.
3.9.14 The Commission continued the approach adopted in the previous Orders. The
Commission has calculated the average rate of depreciation at the rates applicable
for various classes of assets as per TERC MYT Regulations, 2015. The average rate
of depreciation is applied to arrive at the allowable depreciation for FY 2020-21 to FY
2023-24respectively. However, while considering the weighted average depreciation
rate, the Commission has not considered depreciation for the assets block whereby
the accumulated depreciation exceeds 90% of the Gross Fixed Assets value. Also,
the opening balance of Gross Fixed Assets as on FY 2020-21 has been considered
equivalent to the closing balance approved by the Commission for FY 2019-20 in the
tariff order dated 2 September 2022. The Capitalisation as proposed by Petitioner
has been approved by the Commission.
3.9.15 The summary of depreciation as approved by the Commission is shown in the Table
below:
Table 25: Depreciation for FY 2020-21 to FY 2023-24approved by the Commission (Rs. Crore)
Rokhia gas based thermal power plant (RGTPP)
Opening GFA 260.65 254.22 255.20 255.20
Closing GFA 254.22 255.20 255.20 255.20
Avg. Dep. Rate 2.31% 1.89% 1.89% 1.89%
Depreciation 5.94 4.81 4.81 4.81
Baramura gas based thermal power plant (BGTPP)
Opening GFA 173.70 209.99 217.36 217.36
Addition during the year 36.29 7.37 - -
Closing GFA 209.99 217.36 217.36 217.36
Avg. Dep. Rate 2.24% 2.70% 2.66% 2.66%
Depreciation 4.30 5.78 5.78 5.78
Gumti Hydro Electric Plant (GHEP)
Opening GFA 32.26 30.83 30.83 30.83
Addition during the year (1.43) - - -
Closing GFA 30.83 30.83 30.83 30.83
Avg. Dep. Rate 4.19% 4.49% 4.49% 4.49%
Depreciation 1.32 1.38 1.38 1.38
Total Depreciation 11.56 11.97 11.97 11.97

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3.10 Interest on Working Capital

3.10.1 The Petitioner has submitted that the working capital is estimated for calculating the
normative interest charges to be allowed for financing the working capital
requirements. As per TERC MYT Regulations, 2015, the working capital norms have
been defined separately for thermal generation station and Hydro generating
stations, as given below:
For Open-cycle Gas Turbine/Combined Cycle thermal generating stations (for

RGTPP and BGTPP):
a. One month Fuel cost

b. Maintenance spares @ 30% of operation and maintenance expenses
c. Receivables equivalent to two months of capacity charge and energy
charge
d. One Month O&M Expenses
For Hydro generating station (for GHEP):
a. Receivables equivalent to two months of fixed cost

b. Maintenance spares @ 15% of operation and maintenance expenses
c. One Month O&M Expenses
3.10.2 Based on the above submission, the Petitioner has calculated the normative working
capital requirements as per TERC regulations and has tabulated below:
Table 26: Interest on working Capital for FY 2020-21 to FY 2023-24, submitted by TSECL (Rs.
Crore)
FY 2020- FY 2021- FY 2022- FY 2023-
Particulars
21 22 23 24
RGTPP
Fuel Cost for 30 days* 7.29 7.62 19.65 28.13
Receivables for 2 months 19.32 19.46 44.28 62.17
O&M Expenses for one month 0.35 0.51 0.57 0.65
Maint Spares @30% of O&M Expenses 1.26 1.84 2.05 2.33
Grand Total 28.21 29.43 66.55 93.29
Normative Interest rate 11.15% 10.40% 10.55% 12.40%
Interest on Working Capital 3.15 3.06 7.02 11.57
BGTPP
Grand Total 15.07 22.98 51.43 58.40
GHEP

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FY 2020- FY 2021- FY 2022- FY 2023-

Particulars
21 22 23 24
Grand Total 0.96 2.54 2.68 3.07
Total Interest on Working Capital 4.93 5.71 12.73 19.19
3.10.3 As per the Regulation 31 of the TERC MYT Regulations, 2015, the calculation of the
normative working capital requirements of Gas and Hydro based Generating Station
is specified which is outlined as below:
30. Interest on Working Capital:
I. The working capital shall cover:
b. Open-cycle Gas Turbine/Combined Cycle thermal generating stations
i. Fuel cost for 30 days corresponding to the normative annual plant availability
factor, duly taking into account mode of operation of the generating station on
gas fuel and liquid fuel;
ii. Liquid fuel stock for 15 days corresponding to the normative annual plant
availability factor, and in case of use of more than one liquid fuel, cost of main
liquid fuel duly taking into account mode of operation of the generating
stations of gas fuel and liquid fuel;
iii. Maintenance spares @ 30% of operation and maintenance expenses
specified in Clause 31;
iv. Receivables equivalent to two months of capacity charge and energy charge
for sale of electricity calculated on normative plant availability factor, duly
taking into account mode of operation of the generating station on gas fuel
and liquid fuel; and
v. Operation and maintenance expenses for one month.
c. Hydro generating station:
i. Receivables equivalent to two months of fixed cost;

ii. Maintenance spares @ 15% of operation and maintenance expenses
specified in Clause 31; and
iii. Operation and maintenance expenses for one month.
3.10.4 The Commission has computed the total working capital requirement in accordance
with Regulation 31 of TERC MYT Regulations, 2015. To estimate the working capital
requirement for FY 2020-21 to FY 2023-24corresponding to O&M expenses, the
Commission has taken the normative O&M expenses as specified in earlier Section
of this order.
3.10.5 With regards to the consideration of Receivables while calculating the Interest on
Working Capital, the Commission notes that no separate billing of Generation and

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Transmission function has been undertaken to the retail supply business and the
operation of the entities has been undertaken as a single business without any
commercial arrangement. Therefore, considering Revenue as a component for
calculation of working capital requirement for Generation, Transmission and
Distribution function separately will result in double accounting and hence in case of
own Generating Stations, no amount shall be allowed towards receivables, to the
extent of supply of power by the Generation Business to the Retail Supply Business,
so as to avoid any double accounting and additional burden on the consumers.
3.10.6 As per Regulations 31 (III) of TERC MYT Regulations, 2015, the interest rate for
computing IoWC is considered as the weighted average SBI Base plus 300 basis
points as on 1st April of the year for which tariff is determined.
Table 27: Computation of rate of Interest on Working Capital
Effective Date Effective

Additional Rate of
FY of SBI Base SBI Base
Basis points IoWC
Rate Rate
FY 2020-21 10-03-2020 8.15% 3.00% 11.15%

FY 2021-22 10-03-2021 7.40% 3.00% 10.40%
FY 2022-23 15-03-2022 7.55% 3.00% 10.55%
FY 2023-24 15-03-2023 9.40% 3.00% 12.40%
Source - https://www.sbi.co.in/web/interest-rates/interest-rates/base-rate-historical-data
3.10.7 The Commission has computed the IoWC for FY 2020-21 to FY 2023-24considering
the above rates as follows:
Table 28: Interest on Working Capital for FY 2020-21 to FY 2023-24, approved by the
Commission (Rs. Crore)
FY 2020- FY 2021- FY 2022- FY 2023-
Particulars
21 22 23 24
RGTPP
Receivables for 2 months - - - -
Grand Total 22.10 23.45 30.64 35.62
BGTPP
Grand Total 13.53 16.37 25.34 26.28
GHEP

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FY 2020- FY 2021- FY 2022- FY 2023-

Particulars
21 22 23 24
Grand Total 0.80 0.85 0.91 0.97
Total Interest on Working Capital 4.06 4.23 6.00 7.80
3.11 Return on Equity and Tax on Income

3.11.1 TSECL has submitted that in line with Regulations 26 of TERC MYT Regulations,
2015, Return on Equity is required to be computed at a base rate of 15.50% for
thermal stations and 16.50% storage type hydro stations on equity base. Accordingly,
Base rate for calculation of RoE of two gas plants (RGTPP & BGTPP) and GHEP
would be 15.50% and 16.50% respectively.
3.11.2 Further the Petitioner has submitted that the amount of equity base to be considered
for calculation of return has been calculated based on the Regulations 21 of TERC
MYT Regulations, 2015, which states
“For a project declared under commercial operation on or after 16 th Oct 2015, if

the equity actually deployed is more than 30% of the capital cost, equity in excess
of 30% shall be treated as normative loan. In case of the generating station
declared under commercial operation prior to 16th Oct 2015, debt-equity ratio
allowed by the Commission for determination of tariff for the period ending the
year before the date of publication of above regulation on the Official Gazette shall
be considered”.
3.11.3 The Petitioner has submitted that the Commission in its past orders had considered
equity base for the generation projects as 30% of the Gross Fixed Asset Value and
as such the same is considered here for the purpose of calculation of RoE based on
legal precedent as per past orders.
3.11.4 Accordingly, the Equity fund of Petitioneris calculated after allocating equity fund of
Petitioner in the Gross fixed assets ratio among generation, transmission and
distribution business. After that equity fund of generation business allocated among
three plants based on gross fixed assets ratio for each of the plants.
3.11.5 Further, the Petitioner submitted that no actual tax has been claimed and accordingly
there is no change in rate of return. Based on the above submission, the Return on
Equity claimed by the Petitioner is outlined in the Table below:

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Table 29: Calculation of Equity Fund and Return on Equity as claimed by the Petitioner (Rs.
Crore)
FY 2020- FY 2021- FY 2022- FY 2023-
Particulars
21 22 23 24
RGTPP
Total GFA 277.08 238.69 238.69 238.69
Normative Equity fund (30% of GFA) 83.12 71.61 71.61 71.61
Return on Equity 12.88 11.10 11.10 11.10
BGTPP
Total GFA 197.53 166.45 166.45 166.45
Return on Equity 9.19 7.74 7.74 7.74
GHEP
Total GFA 15.85 14.77 14.77 14.77
Return on Equity 0.78 0.73 0.73 0.73
Total Return on Equity Claimed 22.85 19.57 19.57 19.57
3.11.6 Regulation 26 of TERC MYT Regulations, 2015 specifies for computation of Return
on Equity for Control period. Further, Regulation 21 of TERC MYT Regulations, 2015
specifies for computation debtequity and limited the amount of equity to 30% of GFA
after excluding the consumer contribution or grant.
3.11.7 The Commission in previous Orders has adopted a principle for computation of
Regulatory equity, in absence of assets register and after considering the consumer
contribution/grant. For computing the equity capital, the Commission has considered
the same principle in the present Order.
3.11.8 Accordingly, the equity capital has been computed as 30% of Gross Fixed assets
after excluding consumer contribution/grant. However, the segregated details of
consumer contribution/grant are not available at this stage before the Commission,
hence, the Commission applies the uniform percentage of consumer
contribution/grant across generation, transmission and distribution business for FY
2020-21 and FY 2021-22. Also, the derived capital grants towards GFA of FY 2021-
22 has been considered for FY 2022-23 and FY 2023-24 for projection purpose. The
contribution of Capital Grants towards GFA from FY 2022-23 and FY 2023-24 will be
reviewed by the Commission at the time of final true-up based on the audited
accounts.
3.11.9 The detailed calculation of Equity base as approved by the Commission is outlined in
the following table:

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Table 30: Equity Base for Generating Station for FY 2020-21 to FY 2023-24approved by the
As per Balance Sheet of TSECL
GFA 1,513.66 1,530.54
CWIP 905.13 1,097.26
Capital Grant 1,301.24 1,423.95
Capital Grant towards GFA 814.30 829.37
Capital Grant towards GFA (%) 53.80% 54.19% 54.19% 54.19%
Calculation of Equity Base of Generating Plants
RGTPP
Opening GFA 260.65 254.22 255.20 255.20
Closing GFA 254.22 255.20 255.20 255.20
Average 257.44 254.71 255.20 255.20
Normative Equity (30% of GFA) 77.23 76.41 76.56 76.56
Equity base for RoE calculation 35.68 35.01 35.07 35.07
BGTPP
Opening GFA 173.70 209.99 217.36 217.36
Closing GFA 209.99 217.36 217.36 217.36
Average 191.84 213.67 217.36 217.36
GHEP
Opening GFA 32.26 30.83 30.83 30.83
Closing GFA 30.83 30.83 30.83 30.83
Average 31.54 30.83 30.83 30.83
3.11.10 The Petitioner has not considered any interest on Loan in the tariff Petition
and hence the Commission has also not computed the same.
3.11.11 Based on the approach as adopted by the Commission, the approved Equity
base of all the Generating Station is considered for calculation of Return on Equity as
specified in above said Table. The approved Return on Equity is calculated as per
Regulations 26 and 27 of TERC MYT Regulations, 2015 and is outlined in the
following table:
Table 31:RoE for FY 2020-21 to FY 2023-24approved by the Commission (Rs. Crore)
RGTPP
Equity Base for the year 35.68 35.01 35.07 35.07
Pre-tax RoE 15.50% 15.50% 15.50% 15.50%
Return on Equity 5.53 5.43 5.44 5.44
BGTPP
Pre-tax RoE 15.50% 15.50% 15.50% 15.50%
Return on Equity 4.12 4.55 4.63 4.63
GHEP
Pre-tax RoE 16.50% 16.50% 16.50% 16.50%
Return on Equity 0.72 0.70 0.70 0.70
Total RoE 10.37 10.68 10.77 10.77

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3.12 Non-Tariff Income

3.12.1 The Petitioner has submitted that the other income of TSECL covers mainly interest
earned on fixed deposits made in various banks, sale of tender forms and other
miscellaneous income like sale of scrap, sale of tender, meter rent etc. These
incomes are being separately booked under other income category. The figure
submitted for FY 2020-21 and FY 2021-22 are based on the figures derived from
division wise account statement. Also, the figures for FY 2022-23 and FY 2023-
24have been derived based on the previous years’ trend.
Table 32: Non-Tariff Income as per Petitioner for FY 2020-21 to FY 2023-24(Rs. Crore)
RGTPP - 0.18 0.18 0.18
BGTPP 0.02 0.31 0.31 0.31
GHEP 0.11 0.30 0.30 0.30
Total 0.13 0.79 0.79 0.79
3.12.2 As per Regulations 23 of TERC MYT Regulations, 2015, Non-Tariff income is

required to be deducted to arrive at the Annual Fixed Charges of the Generating
Station.
3.12.3 The Petitioner has submitted that it has not segregated the account statements for
generation, transmission and distribution business completely and the allocation has
been undertaken based on certain principles, wherever necessary for ARR and tariff
calculation. This has been undertaken based on the division wise break-up of
account statements and making suitable assumptions, as necessary, for the common
functions like accounts and finance, HR, projects etc. at corporate level.
3.12.4 The Petitioner has provided the details of consolidated amount of the Non-Tariff
Income withproviding break-up of the same component wise and has reconciled the
same with the available audited. The Commission approves the Non-Tariff Income of
Generating Station as proposed by the Petitioner for the purpose of truing up of FY
2020-21 and FY 2021-22 based on actuals.
3.12.5 With regards to the FY 2022-23 and FY 2023-24, the Commission approves the Non-
Tariff Income as approved for FY 2021-22 after truing up. The actual income for FY
2022-23 and FY 2023-24 shall be considered at time of truing up for respective
years, subject to prudence check.

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Table 33: Non-Tariff Income for FY 2020-21 to FY 2023-24approved by the Commission (Rs.
Crore)
RGTPP - 0.18 0.18 0.18
BGTPP 0.02 0.31 0.31 0.31
GHEP 0.11 0.30 0.30 0.30
Total 0.13 0.79 0.79 0.79
3.13 Sharing of Gains and Losses on Controllable Parameters

3.13.1 Regulations 10 (IV) of TERC MYT Regulations, 2015 clearly states that the
generating station shall carry out truing up of tariff of generating station based on the
performance of Controllable Parameters such as SHR, Secondary Fuel Oil
Consumption, Auxiliary Energy Consumption and Refinance of Loan. Also, as per
Regulations 7 (IV), it specifies that the Commission will broadly classify costs
incurred by generating company as controllable and non-controllable, for which the
target will be set and such targets will be used for computing revenue requirement.
3.13.2 Also, as per Regulations 10 (VII) of TERC MYT Regulations, 2015, the financial
gains on account of controllable parameters shall be shared with the beneficiaries in
the ratio of 60:40.
“VII. The financial gains by a generating company or the Transmission or the
Distribution licensee, on account of controllable parameters shall be shared
between generating company or the Transmission or the Distribution licensee
and the beneficiaries on monthly basis with annual reconciliation. The
financial gains computed shall be shared in the ratio of 60:40 between
generating company or the Transmission or the Distribution licensee as the
case may be, and the beneficiaries.”
3.13.3 In view of the aforementioned Regulations, at the time of truing up, it is necessary to
share any financial gain on account of controllable parameters with the beneficiaries,
which has not been proposed by the Petitioner. Accordingly, the Commission has
computed sharing mechanism of financial again due to resultant saving in normative
and actual expenses of Fuel Expenses for FY 2020-21 and FY 2021-22.
Sharing of Fuel Expenses:
3.13.4 With regards to Fuel Expenses, the difference between the actual fuel cost and the
normative fuel cost as due to consideration of norms for SHR and Auxiliary
Consumption Loss is considered for sharing of Financial Gains.
3.13.5 The detailed with regards to the approved actual operational parameters and the
norms as specified in the TERC MYT Regulations, 2015 is outlined in the below table
which is considered for calculation of the normative and actual fuel cost.

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Table 34: Actual and Normative Operational Parameters for Fuel Cost for FY 2020-21 and FY
2021-22
FY 2020-21 FY 2021-22
Norm as per
Particulars Units
Regulations
Approved Actual Norms
Station Heat Rate
RGTPP kCal/kWh 3702.50 3699.83 3,700
BGTPP 3459.95 3552.22 3,700
Auxiliary Consumption
RGTPP % 1.00% 1.00% 1%
BGTPP 1.00% 1.00% 1%
3.13.6 Based on the above operational parameters, the normative Fuel Cost has been
computed and the difference of actual and normative fuel cost will be considered as a
financial gain to be shared with the beneficiaries in the ratio of 60:40. The detailed
computation of the same is as outlined below:
Table 35: Sharing of Financial gain on Fuel Cost for FY 2020-21 and FY 2021-22
Particulars Units FY 2020-21 FY 2021-22
RGTPP BGTPP RGTPP BGTPP
Total Normative cost of Gas Rs. Crs 87.39 43.87 91.47 69.83
Actual Fuel Cost Rs. Crs 87.45 41.02 91.46 67.04
Financial Gain, if Actual cost is
Rs. Crs - 2.85 0.01 2.79
lower than normative
Sharing with Beneficiaries Rs. Crs - 1.41 0.00 1.12
3.14 Summary of True-up for FY 2020-21 and FY 2021-22and ARR for FY 2022-23 to
FY 2023-24
3.14.1 Based on the approval of various components of the ARR, the Commission has
undertaken the truing up exercise for FY 2020-21 and FY 2021-22as elaborated
above in accordance with the tariff Regulations and justification, the Commission
approves the ARR comprising of Fuel Cost and Annual Fixed Charges (AFC) in the
determination of Revenue Requirement process.
3.14.2 Also, the Commission has undertaken the exercise for determination of ARR for FY
2022-23and FY 2023-24 based on approval of various ARR Components, as
elaborated above in accordance with the tariff Regulations and justification. The
Commission has accordingly approved the ARR comprising of Fuel Cost and Annual
Fixed Charges (AFC) in the determination of Revenue Requirement process for the
said purpose.
3.14.3 Considering the FY 2020-21 and FY 2021-22, the Commission would like to highlight
that the AFC as calculated considering the truing up of various components is
recoverable at Target normative availability, as specified in Regulations 37 of TERC
MYT Regulations, 2015.
3.14.4 As the actual Availability of the BGTPP Generating Station was lower than the target
normative Availability approved for recovery of full AFC, the Commission has
disallowed the AFC on account of approved the recovery of trued-up AFC on pro-rata

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basis for BGTPP.

3.14.5 The Computation of ARR comprising of Fuel Cost and Annual Fixed Charges (AFC)
along with the disallowance due to non-achievement of target normative availability in
the truing up of FY 2020-21 and FY 2021-22 and determination of ARR for FY 2022-
23 and FY 2023-24is outlined in the table below:

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Table 36: ARR for FY 2020-21to FY 2023-24 for RGTPPapproved by the Commission (Rs. Crore)
Submitted by the Petitioner Approved in this Order
Sr. No Particulars
FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
A Annual Fixed Charges
1 O&M Expenses 6.02 6.13 6.83 7.78 6.02 6.13 6.83 47.08
2 Depreciation 6.39 5.18 5.18 5.18 5.94 4.81 4.81 4.81
3 Interest and Finance Charges - - - - - - - -
4 Return on Equity 12.88 11.10 11.10 11.10 5.53 5.43 5.44 5.44
5 Interest on Working Capital 3.15 3.06 7.02 11.57 2.46 2.44 3.23 4.42
6 Sharing of (gains)
7 Less: Non-tariff Income - 0.18 0.18 0.18 - 0.18 0.18 0.18
Reduction in AFC due to Low
8 (1.41) - - -
availability
Total 28.44 25.29 29.95 35.45 18.55 18.63 20.13 61.57
B Energy Charges
1 Fuel Cost 87.45 91.46 235.74 337.59 87.39 91.47 164.83 210.86
2 Sharing of (gains) - - - - - (0.00) - -
Total 87.45 91.46 235.74 337.59 87.39 91.46 164.83 210.86
C Net ARR 115.89 116.75 265.69 373.04 105.94 110.09 184.96 272.43
1 Gross Generation (MU) 347.11 334.09 301.99 386.32 347.11 334.09 301.99 386.32
2 Net Generation (MU) 343.64 330.75 298.97 382.45 343.64 330.75 298.97 382.45
3 Energy Charge Rate (Rs./kWh) 2.54 2.77 7.89 8.83 2.54 2.77 5.51 5.51
4 PLF (%) 62.90% 60.54% 54.72% 70.00% 62.90% 60.54% 54.72% 70.00%
5 PAF (%) 79.01% 95.80% 95.00% 95.00% 79.01% 95.80% 85.00% 85.00%

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Table 37: ARR for FY 2020-21 to FY 2023-24 for BGTPP approved by the Commission (Rs. Crore)
Sr. No Particulars
1 O&M Expenses 6.59 6.54 6.75 7.49 6.59 6.54 6.75 31.39
2 Depreciation 4.42 5.93 5.93 5.93 4.30 5.78 5.78 5.78
3 Interest and Finance Charges
4 Return on Equity 9.19 7.74 7.74 7.74 4.12 4.55 4.63 4.63
6 Sharing of (gains) - - - - - - - -
7 Less: Non-tariff Income 0.02 0.31 0.31 0.31 0.02 0.31 0.31 0.31
Reduction in AFC due to Low
8 (5.99) (4.52) - -
availability
Total 21.86 22.29 25.54 28.09 10.50 13.74 19.52 44.74
B Energy Charges
1 Fuel Cost 41.02 67.04 178.34 203.37 43.87 69.83 168.89 170.94
2 Sharing of (gains) - - - - (1.14) (1.12) - -
Total 41.02 67.04 178.34 203.37 42.73 68.71 168.89 170.94
C Net ARR 62.88 89.33 203.88 231.46 53.23 82.45 188.41 215.68
3 Energy Charge Rate (Rs./kWh) 2.15 2.88 5.83 6.57 2.30 3.00 5.52 5.52
4 PLF (%) 52.32% 63.94% 83.98% 85.00% 52.32% 63.94% 83.98% 85.00%
5 PAF (%) 54.12% 59.53% 55.76% 55.76% 54.12% 63.94% 85.00% 85.00%

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Table 38: ARR for FY 2020-21 to FY 2023-24 for GHEP approved by the Commission (Rs. Crore)
Sr. No Particulars
1 O&M Expenses 3.46 4.20 4.45 5.13 3.42 3.65 3.89 4.15
2 Depreciation 0.66 0.68 0.68 0.68 1.32 1.38 1.38 1.38
3 Interest and Finance Charges
4 Return on Equity 0.78 0.73 0.73 0.73 0.72 0.70 0.70 0.70
6 Sharing of (gains)
8 Total 4.91 5.57 5.84 6.62 5.44 5.52 5.77 6.05
11 PLF(%) 9.10% 10.72% 12.36% 12.36% 9.10% 10.72% 12.36% 12.36%
Table 39: ARR for FY 2020-21 to FY 2023-24 for Generation Business approved by the Commission (Rs. Crore)
Sr. No Particulars FY 2020- FY 2021- FY 2022- FY 2023- FY 2020- FY 2021- FY 2022- FY 2023-
21 22 23 24 21 22 23 24
1 O&M Expenses 16.07 16.87 18.03 20.41 16.03 16.32 17.47 82.62
2 Depreciation 11.48 11.79 11.79 11.79 11.56 11.97 11.97 11.97
3 Interest and Finance Charges - - - - - - - -
4 Return on Equity 22.85 19.57 19.57 19.57 10.37 10.68 10.77 10.77
6 Sharing of (gains) - - - -
7 Reduction in AFC due to Low availability (5.99) (4.52) - -
9 Fuel Cost 128.47 158.50 414.08 540.96 130.12 160.18 333.72 381.80
10 Total 183.68 211.66 475.41 611.13 166.02 198.06 379.14 494.16

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3.15 Generation Tariff for FY 2023-24

3.15.1 Based on the approved Aggregate Revenue requirement including Annual Fixed
Cost and Energy Charges, the Commission approves the Generation Tariff for FY
2023-24as shown in the following Table:
Table 40: Generation Tariff for FY 2023-24approved by the Commission

Sr. FY 2023-24
Particulars UoM
No. Petition Approved
RGTPP
1 Annual Fixed Charges Rs. Crore 35.45 61.57
2 Energy Charges Rs./kWh 8.83 5.51
BGTPP
2 Energy Charges Rs./kWh 6.57 5.52
GHEP
Total
Energy Charges for thermal
2 Rs./kWh 7.82 5.52
Station (wt. Avg.)

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2022-23 and ARR of FY 2023-24for Transmission Business

4.1.1 The Commission in its Order dated 01 September 2020 in Case No. 4 of 2020 and 5
of 2020 has approved Truing-up for FY 2013-14 to FY 2016-17 and ARR for FY
2017-18 to FY 2020-21 with Generation, Transmission and Retail Tariff determination
of FY 2020-21. The Tariff Order for determination of tariff for FY 2021-22 was not
issued, hence, the same tariff approved for FY 2020-21 and was continued for FY
2021-22 as well.
4.1.2 Further, the Commission vide its Order dated 2 September, 2022 in Case No. 2 of
2022 and 4 of 2022 has approved the Truing up for FY 2020-21 and FY 2021-22,
APR for FY 2020-21, ARR for FY 2021-22 and FY 2022-23 and Tariff for FY 2022-
23.
along with the audit report is submitted as an Annexure along with the petition.
4.1.4 The TERC Tariff Regulations, 2015 provides for truing-up of all the parameters of
FY2020-21 and FY 2021-22based on the audited annual accounts submitted by
4.1.5 TSECL in its Petition has provided the break-up of costs in generation, transmission
and distribution business, wherever necessary for ARR and tariff calculation, based
on the division wise break-up of account statements and making suitable
assumptions, as necessary, for the common functions like Accounts & finance, HR,
Projects etc. at corporate level. As such, TSECL is submitting a combined petition for
generation, transmission and distribution business with segregated ARR calculations.
Accordingly, the Commission has relied upon the said submission related to function-
wise data submitted by TSECL along with replies to data gaps submitted by TSECL
for truing-up of FY 2020-21 and FY 2021-22. There is already a process undergoing
for separation of Transmission business from Generation & Distribution business.
2020-21 and FY 2021-22.The Commission has relied on the TERC MYT
Regulations, 2015 for truing up of all the parameters of ARR at the end of each year
based on the audited accounts and prudence check by the Commission.
4.1.7 Also, the instant petition has been filed considering the projection of data based on
the actual data of past years and norms as specified in TERC MYT Regulations,
2015, as applicable for determination of ARR for FY 2022-23 and FY 2023-

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24.However, the Commission has considered the determination of ARR process till
FY 2023-24 as discussed in Chapter 1 of this Order.
proceedings, the Commission has undertaken the prudence check for approval of
each expenditure and determination of Revenue Requirement of TSECL
Transmission Business for the FY 2020-21 to FY 2023-24as set out below:
4.2 Transmission Loss

4.2.1 The Petitioner in the submission in relation to the energy balance has highlighted the
intra-state transmission loss of 3% for FY 2020-21 and FY 2021-22 and projected the
similar trend for FY 2022-23 and FY 2023-24, as shown in the following Table:
Table 41: Transmission Loss from FY 2020-21 to FY 2023-24as submitted by the Petitioner (%)
Transmission Loss 3.00% 3.00% 3.00% 3.00%
4.2.2 The Commission notes that, in past Orders, it has been approving T&D loss for
TSECL. There is no segregation of Transmission and Distribution Loss.
4.2.3 The Commission in last Tariff Order has approved target of 6% of transmission loss
for FY 2020-21 to FY 2022-23. The Commission would like to deviate from the Target
approved in last Tariff Orders. Hence, though the Commission has approved
transmission loss of 6% for FY 2020-21 to FY 2022-23, it has deviated the approach
for FY 2023-24.
4.2.4 Further, it is noted that four (4) years of the Control Period are already over. The
actual transmission loss is not available due to absence of complete voltage wise
metering and calculation of losses. Hence, stipulating the same target for years
would not be prudent. In view of the above, the Commission approves transmission
loss target of 3% for FY 2023-24.
4.2.5 Further, the Commission directs TSECL to complete the boundary metering and
commence the measurement and accounting of separate voltage-wise losses for
Transmission business. The progress of the same shall be submitted to the
Commission in next Tariff Petition.
4.2.6 In view of the above, the transmission loss approved by the Commission is shown in
the following Table:

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Table 42: Transmission Loss from FY 2017-19 to FY 2022-23approved by the Commission (%)
Transmission Loss 6.00% 6.00% 6.00% 3.00%
4.3 Annual Fixed Cost (AFC)

4.3.1 Regulation 23 of the MYT Regulations, 2015 specifies the components of Annual
Fixed Cost for a transmission system including communication system as follows:
a. Return on equity;
b. Interest on loan capital;
c. Depreciation;
d. Interest on working capital;
e. Operation and maintenance expenses;
f. Recovery of fee for tariff petition filing; and
g. Minus Non-tariff income

4.4.1 TSECL has submitted that TERC MYT Regulations, 2015 stipulates the O&M cost to
be comprising of Employee cost, R&M expense and A&G expense. The Petitioner
has submitted the actual O&M expenses for FY 2020-21 and FY 2021-22based on
the audited annual accounts.
4.4.2 From FY 2022-23 onwards, the employee cost of transmission business has been
projected based on assumption of average annual escalation rate of 5.0% salary
increase form previous year, a 12% additional DA hike in Employee cost from 1
December 22 onwards and the change in number of employees has been considered
based on the data of the number of employees in their current year (FY 22-23) and
next year (FY 2023-24) expected number of retirement and number of employees to
be recruited. The R&M expenses and the A&G expenses have been escalated at the
Wholesale Price Index (WPI) of 6.17%. The O&M expenses have been projected
similar to the distribution business since the nature of business is similar and most of
the O&M expenses in TSECL is on account of the distribution business.
4.4.3 Based on the above submission, the Petitioner has submitted the actual O&M
expenses for FY 2020-21 and FY 2021-22and projected O&M expenses for FY 2022-
23 and FY 2023-24as stated below:
Table 43: O&M Expense for Transmission Business for MYT Period (Rs. Crore) as submitted
by the Petitioner
Sl. No. Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
1 Employee Cost 17.40 18.54 20.13 23.67
2 R&M Cost 2.44 11.31 5.59 5.93
3 A&G Cost 3.59 8.61 5.04 5.35
4 Total 23.43 38.46 30.75 34.95

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4.4.4 The Commission notes that, Regulation 31 (IV) of TERC MYT Regulations, 2015
specifies the norms for O&M Expenses for Transmission system based on number of
bays and transmission line length. However, TSECL in its Petition has proposed the
recovery of actual O&M expenses for FY 2020-21 and FY 2021-22 and has applied
the different principle for determination of normative O&M Expenses for Transmission
System, which is applicable for Distribution system for projection of O&M expenses.
In reply to specific query regarding the justification of the same, TSECL submitted
that, TERC MYT Regulations 2015 provides for calculation of O&M expenses based
on the number of voltage wise bays and nature wise voltage wise length of
transmission lines, however the segregated data of voltage wise and nature wise line
length of transmission lines and voltage wise bays is not available with TSECL.
Hence, TSECL requested the Commission to consider the actual expenditure as per
the account statements.
4.4.5 The Commission notes that, TSECL has not submitted any data regarding the
number of bays and transmission line length for different voltages. In absence of
such data, the Commission cannot proceed for determination of normative O&M
Expenses for Transmission as per norms specified in TERC MYT Regulations, 2015.
Further, the Commission notes that transmission business and distribution network
business involves the transmission and supply of power through a power network
and therefore to some extent is similar in nature.
4.4.6 Accordingly, the Commission in past Tariff Order dated 2 September, 2022 has
adopted the principle for determination of normative O&M Expenses of transmission
business and approved the normative O&M Expenses for FY 2020-21 to FY 2022-23.
4.4.7 Hence, for the purpose of Truing up for FY 2020-21 and FY 2021-22, the
Commission approves the normative O&M expenses as approved in Tariff Order
dated 2 September, 2022. For FY 2022-23, the Commission approves the normative
O&M expenses as approved in Tariff Order dated 2 September, 2022.
4.4.8 Further, the audited accounts for FY 2020-21 and FY 2021-22is available with the
Commission whereby the Commission in this order is undertaking a true-up exercise
and therefore the normative O&M expenses and actual O&M Expenses is compared
for approval purpose. It is submitted that the norms are considered to be ceiling and
any cost above that represent the inefficiencies and needs to be borne by the Utility.
Accordingly, minimum of actual or normative cost is allowed for true-up purpose. The
normative, actual and approved O&M cost component wise for FY 2020-21 and FY
2021-22is highlighted as below:

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Table 44: Normative and actual O&M Expenses for FY 2020-21 and FY 2021-22(Rs. Crore)
FY 2020-21 FY 2021-22
Particulars
Normative Actual Minimum Normative Actual Minimum
Employee Cost 18.20 17.40 17.40 19.17 18.54 18.54
A&G Cost 1.93 3.59 1.93 2.03 8.61 2.03
R&M Cost 2.62 2.44 2.44 2.55 11.31 2.55
Total 22.74 23.43 21.77 23.75 38.46 23.12
4.4.9 For FY 2022-23, the Commission has approved the normative O&M expenses as
approved in Tariff Order dated September 02, 2022. For FY 2023-24, the
Commission has determined the normative expenses based on similar principle
followed for FY 2022-23 as the year is considered as extension in MYT control
Period and extended the parameters specified in Tariff Regulations, 2015. The
normative O&M expenses are determined as under:
(a) The base O&M Expenses are considered same as considered for FY 2022-23
and escalation has been considered on the expenses determined for FY 2022-
23.
(b) The increase in CPI and WPI is considered as 5.35% and 5.32% respectively as
considered for FY 2022-23 for computation of Employee expense and A&G
Expenses.
(c) K-factor has been considered as 1.45% as considered for FY 2022-23
4.4.10 In view of the above, considering the approved O&M expenses for FY 2020-21 and
FY 2021-22and applying the escalation of WPI and CPI Index as well as k Factor, the
O&M Expenses as approved by the Commission for transmission business is shown
in the following Table:
Table 45: O&M Expenses approved for FY 2020-21 to FY 2023-24 by the Commission (Rs.
Crore)
Employee Cost 17.40 18.54 20.20 21.28
A&G Cost 1.93 2.03 2.14 2.25
R&M Cost 2.44 2.55 2.70 2.59
Total 21.77 23.12 25.04 26.12
4.5 Depreciation
4.5.1 TSECL has considered the depreciation rates as per Tariff Regulation (Multi Year
Tariff) 2015 on the gross asset value. The Petitioner submitted that in account
statement provided for FY 2020-21 and FY 2021-22, the depreciation has been
calculated as per depreciation rate provided in Companies Act 2013 i.e. based on the
useful life. Accordingly, the rate of depreciation considered by Petitioner for
calculation of Depreciation is as provided below:

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Table 46: Rate of Depreciation as per Tariff Regulations

Particulars Depreciation Rate
Land 0.00%
Building 3.34%
Computer 15.00%
Furniture 6.33%
Vehicles 9.50%
4.5.2 Based on the reply to the data gaps, TSECL has submitted the actual value of the
gross value of assets and the asset base for calculation of depreciation.
4.5.3 Further, the depreciation asset value in transmission business considered for FY
2021-22 is kept similar for r FY 2022-23 as well as FY 2023-24.
4.5.4 Based on the consideration of the above depreciation rate, the depreciation claimed
by the Petitioner for the Transmission business on the Gross Value of the assets is
outlined as below:
Table 47: GFA and Depreciation for Transmission Asset - Petitioner (Rs. Crore)
Opening GFA 332.21 327.93 329.92 329.92
Closing GFA 327.93 329.92 329.92 329.92
Depreciation 6.87 6.18 6.18 6.18
Avg. Dep. Rate 2.08% 1.88% 1.87% 1.87%
4.5.5 The Commission computed the depreciation as per Regulation 29 of TERC MYT
Regulations, 2015. The scheduled rates of depreciation have been considered as per
Annexure 8 to TERC MYT Regulations, 2015.
4.5.6 It is observed that Fixed Asset Register was not submitted by the petitioner and as a
result the GFA value of the petitioner could not be ascertaind. . Therefore considering
the audited account statement which also follows the Straight Line Method for
calculation of depreciation, the Commission in absence of Fixed Assets Register,
approves the depreciation in line with the audited accounts for FY 2020-21 and FY
2021-22. Also, eventhough the Petitioner has submitted in the petition that the
depreciation claimed are as per TERC MYT Regulations, 2015 on the gross asset
value, whereas the accounts specified SLM depreciation rate as per Companies Act,
2013, it has been observed that TSECL has claimed the depreciation as per
accounts only for truing up. The same is also considered by the Commission for
calculation of depreciation.
4.5.7 Based on the above observation, the Commission has calculated the average rate of
depreciation at the rates applicable for various classes of assets as per TERC MYT
Regulations, 2015. The average rate of depreciation is applied to arrive at the

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allowable depreciation. The Commission has considered the calculation of

depreciation based on the details provided by TSECL in the Petition as well as in the
replies to the data gaps. Also, the opening balance of Gross Fixed Assets as on FY
2020-21 has been considered equivalent to the closing balance approved by the
Commission for FY 2019-20 in the tariff order dated 2nd September 2022.
4.5.8 As regards the addition of GFA, as per the data provided by the Petitioner, the actual
capitalisation during FY 2020-21 and FY 2021-22is provided in the table below,
whereby the Petitioner has not submitted any documentary evidence regarding
the actual capitalisation of assets that have been actually put to use. The
Commission has not considered any capitalisation for FY 2022-23 and FY 2023-
24 based on the submission of TSECL.
Table 48: Capitalisation of Assets for Transmission Business - Petitioner (Rs. Crore)
Capitalisation of Assets (4.28) 1.99 - -
4.5.9 The Commission observed that the amount of capitalisation is very abnormal with no
consistency and no explanation has been provided by the Petitioner for
decapitalisation and capitalisation of assets for all the years. Therefore, it is
necessary to analyse the scheme wise details alongwith the spill over of the CAPEX
and its capitalisation. Accordingly, the Commission directs the Petitioner to
provide the scheme wise details of CAPEX, Capitalisation and justification for
any delay in commissioning of the asset at the time of submission of final
truing up in next tariff petition.
as proposed by the Petitioner.Further, the Commission directs the Petitioner to
4.5.11 Accordingly, the depreciation approved by the Commission for truing up of FY 2020-
21 and FY 2021-22 and for FY 2022-23 and FY 2023-24is shown in the following
Table:
Table 49: GFA and Depreciation for Transmission Asset as approved by the Commission (Rs.
Crore)
Opening GFA 180.98 176.70 178.69 178.69
Closing GFA 176.70 178.69 178.69 178.69
Avg. Dep. Rate 2.08% 1.88% 1.87% 1.87%
Depreciation 3.72 3.34 3.34 3.34

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4.6 Interest and Finance Charges

4.6.1 The Petitioner has submitted that it has not considered any interest charge for FY
2020-21 to FY 2023-24for the transmission business as it does not have any long
term loan and has not incurred any actual expense towards interest and finance
charges.
4.6.2 The Commission accepts the submission of TSECL and has not considered any
interest and finance charges for Control period for Transmission business.
4.7 Return on Equity and Tax on Return on Equity

4.7.1 TSECL has submitted that in line with Regulation 26 of TERC MYT Regulations,
2015, Return on Equity is required to be computed at a base rate of 15.50% for
transmission business.
4.7.2 Further, it is submitted that, the amount of equity base to be considered for
calculation of return has been considered based on the relevant Regulation 21 of
TERC MYT Regulations, 2015 as shown under:
“For a project declared under commercial operation on or after 16th Oct 2015, if
the equity actually deployed is more than 30% of the capital cost, equity in
excess of 30% shall be treated as normative loan. In case of the generating
station declared under commercial operation prior to 16th Oct 2015, debt-equity
ratio allowed by the Commission for determination of tariff for the period ending
the year before the date of publication of above regulation on the Official
Gazette shall be considered.”
4.7.3 The Petitioner has submitted that the Commission in its past orders had considered
equity base for the transmission projects as 30% of the Gross Fixed Asset Value and
as such the same is considered here for the purpose of calculation of RoE based on
legal precedent as per past orders. The equity fund of TSECL is calculated after
allocating equity fund of TSECL in the Gross fixed assets ratio among generation,
transmission and distribution business. After that equity fund of transmission
business is allocated based on gross fixed assets ratio.
4.7.4 With regards to the Income Tax, as per Regulation27 of TERC MYT Regulations,
2015, the Return on Equity is required to be grossed up with effective tax rate and is
stated as below:
“The base rate of return on equity as allowed by the Commission under Clause 26
(mentioned above) shall be grossed up with the effective tax rate of the respective

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financial year. For this purpose, the effective tax rate shall be considered on the
basis of actual tax paid in the respect of the financial year in line with the
provisions of the relevant Finance Acts.
4.7.5 The tax portion on Return on Equity has not been claimed as no tax payment was
booked in the audited accounts statement in FY 2020-21 and FY 2021-22 because of
accumulated financial losses in the books of TSECL.
4.7.6 The GFA has been projected as the same value as the asset value of the previous
GFA addition during the year in FY 2021-22 for FY 2022-23 and for FY 2023-24
respectively. Based on the above submission, the Return on Equity claimed by the
Petitioner is outlined in the Table below:
Table 50: Calculation of RoE for Transmission Business as submitted by the Petitioner (Rs.
Crore)
Rate of Return (%) 15.50% 15.50% 15.50% 15.50%
Return on Equity 15.35 14.63 14.96 15.30
accounts.

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Table 51: Equity Base for Transmission for FY 2020-21 to FY 2023-24 approved by
theCommission (Rs. Crore)
FY FY
FY FY
Particulars 2022- 2023-
2020-21 2021-22
23 24
GFA 1,513.66 1,530.54
CWIP 905.13 1,097.26
Capital Grant 1,301.24 1,423.95
Calculation of Equity Base of Transmission Business
Opening GFA 180.98 176.70 178.69 178.69
Closing GFA 176.70 178.69 178.69 178.69
Average 178.84 177.69 178.69 178.69
4.7.11 Based on the approach as adopted by the Commission, the approved Equity base of
Transmission business is considered for calculation of Return on Equity. Since, no
tax payment is considered for FY 2020-21 and FY 2021-22, the Commission has
considered the rate of Return on Equity as 15.50% as per TERC MYT Regulations,
2015.
4.7.12 The approved Return on Equity is calculated as per Regulations 26 and 27 of TERC
MYT Regulations, 2015 and is outlined in the following table:
Table 52: Return on Equity for Control Period for Transmission Business as approved by the
Rate of Return (%) 15.50% 15.50% 15.50% 15.50%
Return on Equity 3.84 3.79 3.81 3.81

4.8.1 The Petitioner has submitted that the TERC MYT Regulations, 2015 provides for
normative interest on working Capital based on the methodology outlined in the
Regulations. Accordingly, the Petitioner is eligible for interest on working capital
worked out on methodology specified in the Regulations for transmission business as
provided below:
4.8.2 Also, in accordance with the TERC MYT Regulations, 2015, the interest on the
working capital requirement considered is SBI Base Rate plus 300 basis points as on
1st April of the year for which tariff is determined. The Petitioner in the instant Petition
has considered the following interest rate on working capital requirement:

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Table 53: Interest rate on Working Capital (%)

Normative Interest Rate on
11.15% 10.40% 10.55% 12.40%
Working Capital
4.8.3 Accordingly, the Petitioner in accordance with the TERC MYT Regulations, 2015, has
calculated the interest on working capital for Transmission business as shown in the
table below:
Table 54: Interest on working Capital for Transmission Business as submitted by TSECL (Rs.
Crore)
Maint Spares @15% of O&M
3.51 5.77 9.22 10.48
Expenses
Total Working Capital Requirement 13.30 19.16 20.77 23.25
Rate of Interest (%) 11.15% 10.40% 10.55% 12.40%
4.8.4 The Commission has computed the interest on working capital as per principles
specified in TERC MYT Regulations, 2015. With regards to the consideration of
Receivables while calculating the Interest on Working Capital, the Commission has
observed that there is no separate billing has been undertaken to the retail supply
business and the operation of the entities has been undertaken as a single business
without any commercial arrangement. Therefore, considering Revenue as a
component for calculation of working capital requirement for Generation,
Transmission and Distribution function separately will result in double accounting and
hence, no amount shall be allowed towards receivables, to the extent of supply of
power by the Transmission Business to the Retail Supply Business, so as to avoid
any double accounting and additional burden on the consumers.
4.8.5 As per Regulations 31 (III) of MYT Regulations 2015, the interest rate for computing
IoWC is considered as the weighted average SBI Base plus 300 basis points as on
1st April of the year.In view of the above, interest on working capital for transmission
business approved for FY 2020-21 to FY 2023-24 is shown in the following Table:
Table 55: Interest on working Capital for Transmission Business as approved by the
Maint Spares @15% of O&M
3.41 3.56 3.76 3.92
Expenses
Rate of Interest (%) 11.15% 10.40% 10.55% 12.40%

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4.9.1 The Petitioner has submitted that the other income of TSECL covers mainly interest
earned on fixed deposits made in various banks, sale of tender forms and other
miscellaneous income like sale of scrap, sale of tender, meter rent etc. These
incomes are being separately booked under other income category. The figure
submitted for FY 2020-21 and FY 2021-22 are based on the figures derived from
division wise account statement. Also, the figures for FY 2022-23 and FY 2023-
24have been projected based on the previous years’ trend.
4.9.2 For FY 2020-21 and FY 2021-22, TSECL has claimed the actual other income based
on audited accounts for respective years. The Non-tariff income claimed by TSECL is
shown in the following Table:
Table 56: Non-Tariff Income for Transmission Business as per Petitioner for FY 2020-21 to FY
2022-23(Rs. Crore)
Non-Tariff Income 0.12 0.16 0.16 0.18

required to be deducted to arrive at the Annual Fixed Charges of the Transmission
business.
4.9.4 The Petitioner has submitted that it has not segregated the account statements for
generation, transmission and distribution business completely and the allocation has
been undertaken based on certain principles, wherever necessary for ARR and tariff
calculation. This has been undertaken based on the division wise break-up of
account statements and making suitable assumptions, as necessary, for the common
functions like accounts and finance, HR, projects etc. at corporate level.
Income withproviding break-up of the same component wise and has reconciled the
same with the available audited. The Commission, as per the approach adopted in
previous Orders, approves the Non-Tariff Income of Transmission Function as
proposed by the Petitioner for the purpose of truing up of FY 2020-21 and FY 2021-
22.
4.9.6 For FY 2022-23 and FY 2023-24, the Commission approves the Non-tariff income
equivalent to approved for FY 2021-22. The same shall be allowed on actual basis at
time of truing up, subject to prudence check.
Table 57: Non-Tariff Income for Transmission Business for FY 2020-21 to FY 2023-24 approved
by Commission (Rs. Crore)
Non-Tariff Income 0.12 0.16 0.16 0.16

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4.10 Summary of True-up for FY 2020-21 and FY 2021-22 and ARR for FY 2022-23 and
FY 2023-24 for Transmission Business
4.10.1 The Commission in Tariff Order dated 2 September 2022, has approved the Annual
Revenue Requirement for each Year of the MYT Control Period i.e.,from FY 2020-21
to FY 2022-23 as outlined below:
Table 58: Aggregate Revenue Requirement for Transmission Business approved for FY 2020-
21 to FY 2022-23 in Tariff Order dated 02.09.2022 (Rs. Crore)
Sl. No. Particulars Units FY 2020-21 FY 2021-22 FY 2022-23
A Fixed Charge
1 O&M Expenses Rs. Crore 22.74 23.75 25.04
2 Depreciation Rs. Crore 5.02 5.11 5.20
3 Interest on Working Capital Loans Rs. Crore 0.59 0.58 0.62
4 Return on Equity Rs. Crore 4.92 5.00 5.12
5 Total Fixed Charge Rs. Crore 33.27 34.44 35.98
6 Less: Non-Tariff Income Rs. Crore 0.39 0.23 0.14
7 Total Cost Rs. Crore 32.88 34.21 35.84
B Total unit transmitted or wheeled MUs 1,340.69
C Transmission Charges Paisa/kwh 26.73
undertaken the truing up exercise for FY 2020-21 and FY 2021-22 as elaborated
above in accordance with the tariff Regulations and justification and accordingly the
Commission approves Annual Fixed Cost (AFC) in the determination of Aggregate
Annual Revenue Requirement.
2022-23 and FY 2023-24 based on approval of various ARR Components, as
elaborated above in accordance with the tariff Regulations and justification. The
Commission has accordingly approved the Annual Fixed Charges (AFC) in the
determination of Revenue Requirement process for the said purpose.
4.10.4 Considering the FY 2020-21 and FY 2021-22, since the audited accounts were
available, the Commission has calculated AFC considering the truing up of various
components which is recoverable at Target Normative Annual Transmission System
Availability Factor, as specified in Regulations 39 of MYT Regulations 2015.
4.10.5 The Commission notes that, the actual Availability of the Transmission system is not
provided by TSECL. The Commission with an apprehension has approved the total
recovery of AFC and directs Petitioner to provide actual Transmission System
Availability and Normative Annual Transmission System Availability Factor (NATAF)
for the MYT Control period in the next tariff petition.
4.10.6 Based on the above analysis, the submitted and approved Annual Revenue
Requirement for truing up year of FY 2020-21 and FY 2021-22 and for FY 2022-23
and FY 2023-24 is shown in the Table below:

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Table 59: Aggregate Revenue Requirement for Transmission Business for FY 2020-21 to FY 2023-24as submitted by the Petitioner and approved
by the Commission(Rs. Crore)
S. Submitted by TSECL Approved by the Commission

Particulars Units
No. FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
A Fixed Charge
1 O & M Expenses Rs. Crore 23.43 38.46 30.75 34.95 21.77 23.12 25.04 26.12
2 Depreciation Rs. Crore 6.87 6.18 6.18 6.18 3.72 3.34 3.34 3.34
3 Return on Equity Rs. Crore 15.35 14.63 14.96 15.30 3.84 3.79 3.81 3.81
4 Interest on Working Capital Rs. Crore 1.48 1.99 2.19 2.88 0.59 0.58 0.62 0.76
5 Total Fixed Charge Rs. Crore 47.14 61.25 54.07 59.30 29.93 30.82 32.81 34.03
6 Less: Non-Tariff Income Rs. Crore 0.12 0.16 0.16 0.18 0.12 0.16 0.16 0.16
7 Total Cost Rs. Crore 47.02 61.09 53.91 59.12 29.81 30.66 32.64 33.86
B Total unit transmitted or wheeled Mus 1,651.84 1,676.49
C Transmission Charges Paisa/kwh 35.79 20.20
Note: The Commission has determined Transmission Charge for in Paisa/kWh only for FY 2023-24.
4.10.7 Based on the Annual Fixed Charges as approved above and in line with Regulations 34 (I) of TERC MYT Regulations 2015,
transmission charges are required to be recovered on monthly basis from the Transmission System User.
4.10.8 It is abundantly clear that transmission business needs to be separated out as a whole and work as a commercially profitable utility
instead of banking of generation or distribution businesses. The utility needs to work out wheeling charges and losses and recover from
the GENCOs or DISCOMs. It may also be worth to mention that all substations of 33 KV are brought under ambit of transmission
company. It is directed that from now onwards, transmission business should operate as a separate business.

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2022-23 and ARR of FY 2023-24for Distribution Business

5.1.1 The Commission in its Order dated 2 September 2022 has approved Truing-up for
FY 2017-18 to FY 2019-20, ARR for FY 2020-21 to FY 2022-23 for Generation,
Transmission and Retail Tariff determination of FY 2022-23.
5.1.2 The TERC MYT Regulations, 2015 provides for truing-up of all the parameters of
FY 2017-18 to FY 2019-20based on the audited annual accounts submitted by
along with the audit report is submitted as an Annexure along with the Petition.
5.1.4 It is noted that, TSECL has not yet segregated the account statements for
Generation, Transmission and Distribution business and the same is under work in
progress. However, TSECL in its Petition has provided the break-up of costs in
generation, transmission and distribution business, wherever necessary for ARR and
making suitable assumptions, as necessary, for the common functions like Accounts
& finance, HR, Projects etc. at corporate level. As such, TSECL is submitting a
combined petition for generation, transmission and distribution business with
segregated ARR calculations. Accordingly, the Commission has relied upon the said
submission related to function-wise data submitted by TSECL along with replies to
data gaps submitted by TSECL for truing-up of FY 2020-21 and FY 2021-22.
2020-21 and FY 2021-22. The Commission has relied on the TERC MYT
Regulations, 2015 for truing up of all the parameters of ARR at the end of each year
based on the audited accounts and prudence check by the Commission.
5.1.6 Also, the instant petition has been filed considering the projection of data based on
the actual data of past years and norms as specified in TERC MYT Regulations,
2015, as applicable for determination of ARR for MYT Period of FY 2022-23 and FY
2023-24. However, the Commission has considered the MYT period till FY 2023-24
as discussed Chapter 1 of this order.
proceedings, the Commission has undertaken the prudence check for approval of
each expenditure and determination of Revenue Requirement of TSECL Distribution
Business for the FY 2020-21 to FY 2023-24as set out below:

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5.2 Energy Sales

5.2.1 The Petitioner in the true-up petition has provided actual sales for the FY 2020-21
and FY 2021-22. The Energy sales for FY 2022-23 and FY 2023-24 have been
projected based on the trend of category wise sales of past years.It has been
observed that the growth rate in Tripura over the last few years has been slow owing
to various demand side management measures, use of energy efficient appliances
and increase in prosumers. This trend is expected to continue for the next 2 years
and as such the growth rates have been taken based on the past trends.
5.2.2 TSECL submitted that it has proposed some tariff provisions to incentivize growth of
industries and promote increase industrial consumption in the state. This would not
only help the development and economic growth in the state but also help TSECL
improve its HT:LT ratio of sales, reduce losses and improve revenue. Based on the
approval from the Commission and subsequent response, the future trajectory of
sales may be taken accordingly in the next MYT period of corrections, if any, may be
done during the true up of the future years.
5.2.3 Accordingly, based on the past trend, the growth rate and basis of the same,
considered by TSECL for each category of consumers is outlined as below:
Table 60: Growth rate for projection of sales Category wise - by TSECL
Sr. Category of Growth
No Consumers Rate
1. Domestic 10%
2. Public lighting -50.97%
3. Commercial -2.62%
4. Irrigation & Water 17.85%
5. Public water works 10.00%
6. Industries 13.95%
7. Mobile Tower 15.00%
8. Bulk supply 12.95%
9. Tea Garden 31.04%
5.2.4 Accordingly, the Petitioner has submitted the actual category wise energy sales for
FY 2020-21 and FY 2021-22 and projected the Sales for FY 2022-23 and FY 2023-
24based on the past trends applying the growth rate as outlined in the table above.
Accordingly, the category wise actual sales are shown in the following table:

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Table 61: Category-wise Sales submitted by TSECL (MU)

Sr.
Consumer category FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
No
1. Domestic 571.09 640.38 704.42 774.86
2. Public lighting 46.07 11.49 11.49 11.49
3. Commercial 72.00 68.12 68.12 68.12
4. Irrigation & Water 38.00 47.75 56.27 66.32
5. Public water works 75.95 99.53 109.48 120.43
6. Industries 43.44 52.09 59.36 67.65
7. Mobile Tower 28.32 59.95 68.94 79.29
8. Bulk supply 87.54 115.86 130.87 147.82
9. Tea Garden 2.80 4.03 4.03 4.03
10. Kutir Jyoti 17.13 - - -
11. Grand Total 982.33 1,099.22 1,213.00 1,340.02
5.2.5 The Commission notes that the Petitioner has submitted the actual energy sales for
the period from FY 2020-21 and FY 2021-22. Further, energy sales for FY 2022-23
and FY 2023-24 have been projected. The Commission has considered the actual
energy sales for FY 2016-17 to FY 2021-22 as submitted by the Petitioner.The
Commission analysed the past year trend for energy sales and observed that, energy
sales during FY 2018-19 are reduced around by 6.4% over previous year. For
projecting the energy sales for remaining years of the Control Period, the actual
energy sales for FY 2021-22has been considered as base data and the growth rate
is applied on the same for projection purpose.
5.2.6 For projecting the energy sales, the Commission has analysed the growth rate for
different period as shown in the following Table and accordingly has approved the
Growth rate category wise:
Table 62: CAGR computed by the Commission
S. CAGR
Particulars
No. 5 Yr 3 Yr YoY Approved
1 Domestic 6.16% 9.56% 8.87% 9.56%
2 Commercial -2.84% 6.00% -5.39% 6.00%
3 Irrigation 5.84% 14.67% 25.67% 14.67%
4 Public water works 3.92% 17.07% 31.05% 17.07%
5 Industries 2.93% 9.11% 19.91% 9.11%
Tea, Coffee & Rubber
6
Garden 28.66% 40.63% 44.11% 40.63%
7 Bulk supply 7.60% 4.31% 32.36% 4.31%
8 Public Lighting -22.94% -40.20% -75.06% 0.00%
9 Mobile Towers 18.19% 21.98% 111.68% 21.98%
5.2.7 From the above table, the growth rate for most of the consumer categories works out
to be similar to the proposed growth rate of TSECL except for few categories. It has

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been noticed that TSECL has proposed the negative growth rate for certain
categories due to YoY negative trend which may be due to the COVID pandemic and
lockdown Impact.The Commission is of view that TSECL has adopted the
conservative approach for projection of energy sales, without considering the ground
realities and impact of relaxation of lockdown in the State. Therefore, the
Commission has tried to normalise the same considering the relaxation in the COVID
norm at present and will be reviewed at the time of truing up of the respective years.
5.2.8 With respect to number of consumers and connected load of each category of
consumers, TSECL has not provided any rationale on the projection of the Number of
consumers and connected load and no reference of the same was also provided in
true-up petition for FY 2020-21 and FY 2021-22. The Commission has considered
the similar logic as provided in above said paragraphs for projection purpose for
number of consumers and connected load and is outlined in the following table:
Table 63: Category wise Number of Consumers and Connected Load approved by Commission
for FY 2022-23and FY 2023-24
S. FY 2022-23 FY 2023-24 FY 2022-23 FY 2023-24
Particulars
No. No. of Consumers - No Connected Load - KW
1 Domestic 912,556 977,771 248.82 276.90
2 Commercial 76,052 80,731 54.06 58.81
3 Irrigation 8,465 9,103 26.16 27.28
4 Public water works 10,869 12,509 94.50 111.05
5 Industries 6,947 7,462 106.29 110.79
6 Tea, Coffee & Rubber Garden 62 69 1.17 1.29
7 Bulk supply 1,553 1,750 50.84 57.62
8 Public Lighting 2,544 2,671 10.91 11.26
9 Mobile Towers 2,389 2,755 22.39 24.60
10 Grand Total 1,021,436 1,094,820 615.14 679.60
5.2.9 Based on the above analysis, the energy sales approved by the Commission for the
Period from FY 2020-21 to FY 2023-24are shown in the following Table:
Table 64: Category-wise Sales approved by the Commission (MU)
S.
No.
1 Domestic 588.22 640.38 701.61 768.69
2 Commercial 72.00 68.12 72.21 76.54
3 Irrigation 38.00 47.75 54.75 62.79
4 Public water works 75.95 99.53 116.52 136.41
5 Industries 43.44 52.09 56.84 62.02
6 Tea, Coffee & Rubber Garden 2.80 4.03 5.67 7.98
7 Bulk supply 87.54 115.86 120.86 126.06
8 Public Lighting 46.07 11.49 11.49 11.49
9 Mobile Towers 28.32 59.95 73.13 89.21
10 Grand Total 982.33 1,099.22 1,213.09 1,341.19

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5.3 Distribution Loss

5.3.1 The Petitioner has submitted the actual Distribution loss of FY 2020-21 and FY 2021-
22, provisional loss for FY 2022-23and projected the distribution loss for FY 2023-
24as shown in the following Table:
Table 65: Distribution and T&D Loss from FY 2020-21 to FY 2023-24(%)
Sr.
No
1. Distribution Loss (%) 30.72% 27.07% 23.72% 20.62%
2. Transmission Loss (%) 2.54% 2.54% 2.54% 2.54%
3. T&D Loss (%) 32.80% 29.26% 26.00% 23.00%
5.3.2 TSECL submitted the actual loss for FY 2020-21 and FY 2021-22 based on actual
energy sales and actual energy purchased during the years. The high level of T&D
loss, is due to increase in the LT:HT ratio as a result of extensive village
electrification, new service connection in remote areas over the years, huge increase
in the last mile connectivity and LT network etc. During this period, the state has also
seen a number of severe gayles and thunderstorms resulting in damage to the
electrical network and increasing load on the electrical network thereby increasing
technical losses. TSECL has been suffering from old ageing and overloaded assets
like transformers/lines due to limited investment in strengthening and upgradation of
distribution network particularly in HT network of 33 kV and 11 kV.
5.3.3 Further, TSECL also submitted that FY 2020-21 and FY 2021-22 were exceptional
years when the whole world faced the unprecedented challenge of Covid 19 and the
strict lockdowns resulting as a result of Covid 19. Even before this, TSECL was
facing the challenge of reduction in T&D losses as it is not able to invest in system
improvement, capacity strengthening and replacement of ageing assets due to the
accumulated financial losses and limitations in fund availability. The financial position
is getting further affected due to the non-revision of tariff since last 8 years. At his
position, the onset of Covid 19 and it subsequent lockdowns created further difficulty
for TSECL in FY 2020-21 and FY 2021-22 which are provided below:
(a) The lockdowns impacted the timely operation and maintenance of the electrical
system and challenges in regular periodic health assessment and upkeep of
assets required for reducing technical losses
(b) The lockdowns resulted in complete shutdown of industries and commercial
consumers impacting the HT:LT ration of sales thereby impacting the overall
losses
(c) The timely meter reading and bill distribution was also impacted during the
lockdowns and also afterwards in FY 2020-21
(d) The overall economic condition was poor in FY 2020-21 impacting the ability of
consumers to pay the bills and which in turn impacted the revenues and

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cashflows of TSECL
(e) The execution of capex schemes for loss reduction got delayed which resulted in
increase of losses
(f) The replacement of defective meters also got delayed resulting in increase of
losses.
In spite of all the above challenges, TSECL strived continuously to provide reliable
and affordable power to the consumers in the state.
5.3.4 TSECL requested not to impose penalty for not achieving the distribution loss target
in a difficult year of FY 2020-21 because of the above challenge. This penalty will
further weaken the already detoriating financial position of TSECL which is affecting
its overall performance.
5.3.5 Further, TSECL submitted that the Transmission losses for FY 2022-23 and FY
2023-24 has been considered at 2.54% as per the value obtained in FY 2020-21 as
the latest NER transmission loss report figures is yet to be published so for
projections.
5.3.6 TSECL is making sincere efforts in electrifying the un-electrified areas of the state at
a fast pace under grants and loans provided by the Rural Electrification Corporation
(REC) under the Rajiv Grandhi Gramin Viduyatikaran Yojna (RGGVY) and
Saubhagya Scheme. Through the implementation of the scheme the TSECL has
provided the electricity to the far-flung areas and villages to of the Tripura state. At
the same time, due to increase in the LT network and the domestic and Kutir Jyoti
consumers, losses of the utility are also increasing at considerable pace. Through
different loss reducing measures and schemes the TSECL has remained successful
to contain the losses at the level mentioned in the Petition. In the past few years,
TSECL has made limited investments in its distribution network for modernization,
system improvement and loss reduction. However, now, TSECL is implementing
large system improvement schemes under ADB funding as well as under the GoI
scheme of RDSS (Revamped Distribution Sector Scheme) to reduce losses and the
effect of such measures is expected to gradually reflect in the performance of T&D
losses. As such, for future years, TSECL has undertaken a target of reduction of
more than 6% in next 2 years and achieve T&D target of 23% by FY 2023-24.
5.3.7 Accordingly, Petitioner has requested the Commission to approve the Distribution
losses of the TSECL as submitted in the Petition.
5.3.8 The Commission notes that, TSECL has considered the actual Distribution Loss for
FY 2020-21 and FY 2021-22and projected T&D loss for FY 2022-23 and FY 2023-24.
The Commission notes that, in past Orders, it has been approving T&D loss for
TSECL. There is no segregation of Transmission and Distribution Loss. However,
from the last tariff order onwards, TSECL has submitted the separate transmission

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and distribution loss and accordingly, the Commission has also approved the
segregated Transmission and Distribution loss. Further, while segregating the T&D
loss into Transmission Loss and Distribution loss, TSECL has considered the
Transmission loss of 6% and balance is considered to be distribution loss.
5.3.9 The Commission notes that the actual bifurcation of transmission and distribution
loss is not available due to absence of complete voltage wise metering. The
Commission tends to approve the combined T&D losses.
5.3.10 The Commission in Tariff Order dated 2 September 2022 has approved the T&D
losses of 20% for FY 2020-21 and FY 2021-22. The Commission noted the
submission of TSECL regarding the actual higher T&D losses. The Commission is of
view that the T&C losses target has been given to TSECL from UDAY Scheme and
the same has not been complied. The exception for single year on account of
COVID-19 cannot be considered when there is consistent failure in meeting the T&D
losses target. Hence, the Commission approves T&D Loss of 20% for FY 2020-21
and FY 2021-22 for the purpose of truing up. The sharing of gains/losses on account
of the same shall be undertaken in subsequent part of this Chapter.
5.3.11 Considering the difficulty posed by TSECL and upcoming development for
improvement of T&D losses, the Commission has not considered any aggressive
target for TSECL for FY 2022-23 and FY 2023-24 and continue with the same target
of 20% in the present Order.
5.3.12 Although the transmission loss of 3% for Transmission Business is approved for
Transmission business, the Commission has approved T&D loss for the Distribution
Business, as the approach adopted in previous Orders, The T&D loss approved by
the Commission forFY 2020-21 to FY 2023-24is shown in the following Table:
Table 66: T&D Loss from FY 2020-21 to FY 2023-24approved by the Commission (%)
Sr. No Particualrs FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
1. T&D Loss - as per TSECL 32.80% 29.26% 26.00% 23.00%
2. T&D Loss - Approved 20.00% 20.00% 20.00% 20.00%
5.4 Energy Balance

5.4.1 TSECL procures power both from the central generating stations of NTPC, NEEPCO,
OTPC and NTPC as well as from State owned generating stations. The total power
purchased is utilized to meet the demand within the state (intra state sales) and the
surplus power is being sold outside the state.
5.4.2 The Petitioner has submitted the Energy Balance based on the actual Power
Purchase, Sales and T&D Loss for FY 2020-21 and FY 2021-22. However, the same
has been projected for FY 2022-23 and FY 2023-24.
5.4.3 Additionally, the Petitioner has submitted that presently it has an agreement for sale
of power to Bangladesh sale till the end of FY 2025-26 and as such, the same has

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been considered in the projections. However, the energy balance and financial
projections for TSECL is expected to be heavily impacted if the sale to Bangladesh
does not continue further beyond FY 2025-26 and the gap between cost and revenue
will increase significantly in such a scenario. Therefore, TSECL has requested the
Commission to assess the dynamic situation based on the sale to Bangladesh while
approving the ARR projections of TSECL.
5.4.4 TSECL further submitted that the Commission while calculating the energy balance
in each of the years from FY 2017-18 to FY - 2020-21 has erroneously considered
the inter-state transmission losses as the PoC losses for Tripura withdrawal only. It is
pertinent to note that in the PoC mechanism, the transmission losses are calculated
as the sum of the losses applicable at the injection point and the losses applicable at
the withdrawal point. The Commission while calculating the energy balance in FY
2020-21 has erroneously considered the inter-state transmission losses as the PoC
losses for Tripura withdrawal only in the previous petition submitted. It is pertinent to
note that in the PoC mechanism, the transmission losses are calculated as the sum
of the losses applicable at the injection point and the losses applicable at the
withdrawal point. The Regional Load Dispatch Centre also published the weekly
average transmission loss of a region on its website for each year and also for the
last week which is used by the stakeholders for calculation of transmission losses,
calculation of transmission charges and billing of energy and energy management.
This report clearly states the regional transmission losses to be in the range of 2.5-
3.5% on an average basis for the last few years (as against 0.5-1.7% losses
considered by the Commission in the impugned order). The figures of actual regional
transmission losses have been taken from the annual compendium reports of
NERLDC (https://www.nerldc.in/annual-compendium/). The inconsistency or
inadvertent error in consideration of inter state transmission loss is also evident from
the fact that the approved inter-state transmission loss is considered as 0.4-0.5% for
FY 17-20, 1.7% for FY 21 but the same has considered as 3.35% for FY2021-22 and
FY 2022-23. It is easily understood that the inter-state transmission losses do not
vary on year to year basis by such a huge margin and as such, the losses considered
for the period FY 2017-18 to 2020-21 is taken incorrectly as only the withdrawal
losses.
5.4.5 Further, it is submitted that, in the PoC mechanism, the transmission losses are
calculated as the sum of the losses applicable at the injection point and the losses
applicable at the withdrawal point. The Regional Load Dispatch Centre also
published the weekly average transmission loss of a region on its website for each
year and also for the last week which is used by the stakeholders for calculation of
transmission losses, calculation of transmission charges and billing of energy and
energy management. This report clearly states the regional transmission losses to be
in the range of 2.5-3.5% on an average basis for the last few years (as against 1-
1.5% losses considered by the Commission in the impugned order). The actual value
of inter state transmission loss based on total of injection loss and withdrawal loss for

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FY 2020-21 and as well for FY 2021-22 to FY 2023-24 to be considered as 2.54%.

5.4.6 Accordingly, the Petitioner has submitted the Energy Balance for FY 2020-21 to FY
2023-24as shown in the following table:
Table 67: Energy Balance for FY 2020-21 to FY 2023-24as submitted by the Petitioner
Energy from CGS 2,399.73 2,533.67 2,679.33 2,903.99
Power Purchase from Other Sources 37.58 - 76.49 80.31
Inter State Sales 1,456.13 1,556.45 1,671.25 1,969.73
Energy Trading 10.86 - - -
Energy Swapping 1.38 - - -
DSM 76.13 72.90 74.51 74.51
Sale to Mizoram 41.26 115.11 68.46 68.46
Sale to Manipur 41.26 22.45 22.45
IEX 342.79 407.66 545.04 843.52
Bangladesh Sale 942.45 960.78 960.78 960.78
Inter-State Transmission Loss 1.00% 3.48% 2.50% 2.50%
Inter State Transmission Loss 23.97 88.19 66.98 72.60
ISGS Energy at State Bus 919.63 980.84 1017.59 941.97
Energy from State Generation 542.13 572.97 621.79 709.87
Energy at State Bus 1,461.76 1,553.81 1,639.38 1,651.84
Intra State Transmission Loss 43.85 46.61 49.18 49.55
Intra State Transmission Loss (%) 3.00% 3.00% 3.00% 3.00%
Energy at 11 kV level 1,417.91 1,507.20 1,590.20 1,602.29
Energy Sales 982.33 1,099.22 1,213.00 1,271.89
Distribution Loss 435.58 407.98 377.20 330.40
Distribution Loss (%) 30.72% 27.07% 23.72% 20.62%
T&D Loss (%) 32.80% 29.26% 26.01% 23.00%
5.4.7 For the purpose of computing energy balance, the Commission has considered
actual energy purchase for FY 2020-21 and FY 2021-22. For FY 2022-23 and FY
2023-24, the Commission has considered the source wise energy availability as
submitted by the Petitioner. However, the additional energy availability on account of
reduced T&D losstarget has been considered as energy sale through Trading.
5.4.8 The Commission noted the submission of TSECL regarding the POC losses. The
issue has already been addressed by the Commission in Tariff Order dated 2
September 2022 and is not being re-iterated for sake of brevity. Further, the
Commission continues with the approach adopted in that Order and accordingly,
considered the Inter-State Transmission losses for FY 2020-21 and FY 2021-22.
Based on the Transmission loss computed by POSOCO, the Commission has
considered the following Inter State Transmission Loss as declared by POSOCO.

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Table 68: Inter State Transmission Loss approved by Commission (%)

As per TSECL 1.00% 3.48% 2.50% 2.50%
Approved by Commission 1.70% 3.35% 3.56% 3.00%
5.4.9 Based on the approved energy sales, target T&D loss and Tripura Drawl-ISTS POC
loss, the Commission approves the energy balance as shown in the following Table:
Table 69: Energy Balance for FY 2020-21 to FY 2023-24as approved by the Commission(MU)
Energy from CGS 2,362.15 2,533.67 2,667.06 3,034.45
Power Purchase from Other Sources 37.58 91.81 - -
Inter State Sales 1,456.13 1,556.45 1,671.25 1,969.73
Energy Trading 10.86 - - -
Energy Swapping 1.38 - -
DSM 76.13 72.90 74.51 74.51
Sale to Mizoram 41.26 115.11 68.46 68.46
Sale to Manipur 41.26 - 22.45 22.45
IEX 342.79 407.66 545.04 843.52
Bangladesh Sale 942.45 960.78 960.78 960.78
Inter-State Transmission Loss 1.70% 3.35% 3.56% 3.00%
Inter State Transmission Loss 23.97 88.19 95.06 91.03
ISGS Energy at State Bus 919.63 980.84 900.75 973.68
Energy from State Generation 542.13 572.97 615.60 702.81
Energy at State Bus 1,461.76 1,553.82 1,516.36 1,676.49
Intra State Transmission Loss 87.71 93.23 90.98 50.29
Intra State Transmission Loss (%) 6.00% 6.00% 6.00% 3.00%
Energy at 11 kV level 1,374.05 1,460.59 1,425.38 1,626.19
Energy Sales 982.33 1,099.22 1,213.09 1,341.19
Distribution Loss 391.72 361.37 212.29 285.00
Distribution Loss (%)* 28.51% 24.74% 14.89% 17.53%
T&D Loss (%) 32.80% 29.26% 20.00% 20.00%
Note - *Distribution loss are shown as indicative and are higher in FY 2023-24 because of lower
transmission loss approved by the Commission. However, T&D loss are kept at same level, which is
considered for computation of Energy.
5.5 Power Purchase

5.5.1 TSECL has submitted that, it procures power from Central Generating Stations of
NEEPCO, NHPC and OTPC Palatana in which Tripura is having allocated share/
allocation of power. Also, the power purchase rates for these CGS and the
associated transmission charges paid to PGCIL for transmission of power to State
bus of Tripura, are governed by CERC tariff regulations and are uncontrollable by
TSECL.
5.5.2 Accordingly, the power purchase cost as submitted by the Petitioner for the FY 2020-

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21 to FY 2023-24is as shown in the following Table:
Table 70: Actual Power Purchase Cost from FY 2020-21 and FY 2021-22as submitted by
Petitioner
FY 2020-21 FY 2021-22
Power Purchase Energy Cost Per Energy Cost

Cost Cost
Data Purchased Unit Purchased Per Unit
Rs. Rs.
MU Rs/Unit MU Rs/Unit
Crore Crore
NEEPCO 370.12 870.76 4.25 562.95 1,106.23 5.09
NHPC 22.92 71.24 3.22 19.56 45.81 4.27
NTPC 160.96 130.81 12.30 194.96 298.73 6.53
OTPC 423.73 1,284.01 3.30 303.60 1,077.03 2.82
NEEPCO Solar 1.85 5.32 3.48 1.70 5.86 2.90
PGCIL Charges 52.24 142.92
Short term Power
Purchase (IEX, 10.64 37.58 2.83 35.61 91.81
DSM, swapping)
Grand total 1,042.46 2,399.73 4.34 1,261.30 2,625.48 4.80
Table 71: Power Purchase cost for FY 2022-23 and FY 2023-24 as submitted by TSECL
FY 2022-23 FY 2023-24

Cost Cost
Rs. Rs.
Crore Crore
NEEPCO 556.61 1,155.76 4.82 573.31 1,155.76 4.96
NHPC 25.19 73.38 3.43 25.95 73.38 3.54
NTPC 113.53 231.09 4.91 151.17 298.73 5.06
OTPC 391.65 1,212.72 3.23 455.56 1,369.54 3.33
NEEPCO Solar 1.85 6.38 2.90 1.96 6.58 2.99
Short term Power
Purchase (IEX, 28.55 76.49 3.73 31.48 80.31 3.92
DSM, swapping)
Grand total 1,240.60 2,755.82 4.55 1,366.34 2,984.30 4.58
5.5.3 The Commission sought the station wise details of actual power purchase during FY
2020-21 and FY 2021-22 and projected for FY 2022-23 and FY 2023-24. The
Commission has analysed the source wise details of power purchase with respect to
the submission made by the TSECL.
5.5.4 The Commission notes that TSECL has submitted the actual power purchase cost for
FY 2020-21 and FY 2021-22. The Commission notes that audited accounts are

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available and has reconciled the cost with the audited balance sheet. The
Commission notes that the source-wise power purchase cost was reconciled with the
power purchase cost reported in the audited accounts by TSECL in replies to the
data gaps.
5.5.5 Further, the Commission notes that TSECL has not paid any delayed payment
charges for FY 2020-21 and FY 2021-22. Also, the actual power purchase cost does
not include any cost towards the prior period.
5.5.6 In view of the above, for the purpose of truing up, the Commission approves the
power purchase cost for FY 2020-21 and FY 2021-22based on audited accountsand
other details received from TSECL and after due prudence check.
5.5.7 Accordingly, the power purchase cost approved for FY 2020-21 and FY 2021-22after
true-up is shown in the following Table:
Table 72: Power Purchase cost for FY 2020-21 and FY 2021-22approved by the Commission
FY 2020-21 FY 2021-22

Cost Cost
Rs. Rs.
Crore Crore
NEEPCO 369.81 870.76 4.25 552.65 1,106.23 5.00
NHPC 22.61 71.24 3.17 19.56 45.81 4.27
NTPC 160.65 130.81 12.28 194.96 298.73 6.53
OTPC 423.42 1,284.01 3.30 303.60 1,077.03 2.82
NEEPCO Solar 1.54 5.32 2.90 1.70 5.86 2.90
Short term Power
Purchase (IEX, 10.33 37.58 2.75 35.77 91.81 3.90
DSM, swapping)
Grand total 1,040.29 2,399.73 4.34 1,251.15 2,625.48 4.77
5.5.8 For FY 2022-23 and FY 2023-24, the Commission has considered the energy
purchase based on approved T&D loss and energy balance as discussed in earlier
Section of this Order. For these years, source-wise the average rate of power
purchase has been considered same as submitted by the Petitioner.
5.5.9 With regards to the Inter-State transmission charges, actual transmission charges
based on Inter-state transmission charges notification issues by POSOCO has been
considered for FY 2022-23 and similarly, the charges are projected for FY 2023-24.
5.5.10 The approved Power Purchase cost for FY 2022-23and FY 2023-24 is shown in the
following Table:
Table 73: Power Purchase cost for FY 2022-23and FY 2023-24approved by the Commission
FY 2022-23 FY 2023-24
Source Cost Energy Purchased Cost Per Unit Cost Energy Purchased Cost Per Unit
Rs. Crore MU Rs/Unit Rs. Crore MU Rs/Unit

NEEPCO 550.48 1,143.49 4.81 573.31 1,155.76 4.96
NHPC 25.19 73.38 3.43 25.62 73.38 3.49
NTPC 113.53 231.09 4.91 136.83 298.73 4.58

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FY 2022-23 FY 2023-24
Source Cost Energy Purchased Cost Per Unit Cost Energy Purchased Cost Per Unit
Rs. Crore MU Rs/Unit Rs. Crore MU Rs/Unit

OTPC 391.65 1,212.72 3.23 430.25 1,369.54 3.14
NEEPCO Solar 1.85 6.38 2.90 1.96 6.58 2.98
Trading/Swapping - - - 50.62 130.46 3.88
PGCIL Charges 124.43 - - 116.64 - -
TOTAL 1,207.13 2,667.06 4.53 1,335.53 3,034.45 4.40
5.5.11 The Commission is wary of the fact that to achieve the renewable target set by
Government of India, Renewable Purchase Obligation (RPO) by obligated entities
including TSECL is required to be monitored. No details has been provided by
TSECL on the same. The Commission is of the view that it will take up issue of
compliance of RPO in separate proceedings.
5.6 Intra-State Transmission Charges

5.6.1 The Petitioner in the present Petition has submitted Intra-State Transmission
Charges, which is in line with the standalone ARR submitted for separate
Transmission business of TSECL for FY 2020-21 to FY 2023-24.
Table 74: Intra State Transmission Charges (Rs. Crore) as submitted by the Petitioner
Intra State Transmission charges 47.02 61.09 53.91 59.12
5.6.2 The Commission in the previous Chapter of this Order,has approved the Annual fixed
cost for Transmission Business for the Control Period. The Commission has
considered the same Annual fixed cost as intra-state transmission charges for the FY
2020-21 to FY 2023-24as shown in the following Table:
Table 75: Intra State Transmission Charges approved by the Commission(Rs. Crore)
Intra State Transmission charges 29.81 30.66 32.64 33.86

5.7.1 TSECL has submitted that TERC MYT Regulations, 2015 stipulates the principle of
determination of O&M expenses, which comprise of Employee cost, R&M expense
and A&G expense.
 Employee Cost: Employee expenses comprise of salaries, dearness

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allowance, bonus, terminal benefits in the form of pension & gratuity, leave
encashment and staff welfare expenses.
 Repair & Maintenance expenses: The A&G expenses of TSECL mainly
cover expenses for administrative requirements like telephone, electricity,
vehicles lease, statutory taxes to be paid etc and payment of outsourced
agencies like statutory auditors, legal charges, consultancy fees etc.
 Administration and General (A&G) Expenses: Regular Repair and
Maintenance of the electrical system as well as the civil and IT infrastructure
is critical for operating the system and ensuring that assets are able to serve
for complete expected life.
5.7.2 The Petitioner has submitted the actual O&M expenses for FY 2020-21 and FY 2021-
22based on the audited annual accounts.
5.7.3 For FY 2022-23 and FY 2023-24, the projection of these expenses has been done in
accordance with the TERC MYT Regulations, 2015, whereby the employee cost of
distribution business has been escalated at the rate of CPI (Consumer Price Index)
escalation rate of 5.07% based on the actual prorated expenses of FY 2021-22. R&M
expenses have been calculated as 3.98% of GFA (the actual R&M expenses of past
year being 3.98% of GFA). The A&G (Administrative and General) expenses have
been escalated at the Wholesale Price Index (WPI) of 5.17%. Accordingly, the
Petitioner has considered following WPI and CPI Index for projection of Employee
cost and A&G cost.
5.7.4 With regards to the component wise explanation on actual O&M Expenses for
Distribution business, TSECL has submitted the explanation for employee and R&M
expenses as follows:
Employee Expenses
5.7.5 The reason for deviation in the actual and approved O&M expenses is mainly on
account of the high difference in the employee cost which was due to non-
consideration of impact of 7th Pay Revision in the employees cost in the tariff order
dated 1 September 2020. The Commission had calculated the employee cost for
distribution business based on the formula provided in TERC MYT Regulations, 2015
and considering actual employee expense of FY 2015-16 as base and applying the
yearly escalation factor based on CPI and WPI.
5.7.6 However, the Commission has erroneously not considered the impact of 7th Pay
Commission as a onetime provision which is allowed as per regulations and is a
justified expenditure already incurred. Theformula prescribed in clause 31 (V) of
TERC MYT regulations, 2015 clearly allows provisional increases(apart from inflation
increase) based on pay commission. The formula prescribed in clause 31 (V)
ofTERC MYT regulations, 2015 is produced below:
“Employee cost shall be escalated by consumer price index (CPI), adjusted by

provisions for expenses beyond the control of the Distribution Licensee and

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one time expected expenses, such as recovery/adjustment of terminal

benefits, implications of pay commission, arrears and Interim Relief, governed
by the following formula:
EMPn = (EMPb * CPI inflation) + Provision”
5.7.7 It is pertinent to note that TSECL had mentioned the impact of 7th Pay Commission
in its petition clearlystating an increase of around 22% in FY 2017-18 and around 4%
in FY 2016-17. This impact should beconsidered by the Commission under the
Provision, as provided in the above formula. The same was alsoclaimed by TSECL in
the review petition filed by TSECL on the tariff order dated 1 stSeptember 2020.
TheCommission on its order dated on the review petition dated 14 thDecember 2020
had stated the following:
“Para 1.8: Therefore, it would be appropriate to allow such impact based on

actual audited details,subject to prudence check. Hence, the Commission
shall consider such impact at time of truing up ofsuch years based on audited
accounts.”
5.7.8 As such, now based on the audited accounts, TSECL requested the Commission to
consider the actual employee cost and the other O&M expenses based on the
audited statement of accounts.
Repairs & Maintenance Expenses
5.7.9 The R&M expenses in distribution is quite high as the assets are old and because of
the terrain ofthe State which has high forest coverage, high frequency of gayles,
thunderstorms etc. The expensesare required for keeping the reliability of the power
supply.
5.7.10 Based on the above submission, Petitioner has claimed the following O&M expenses
for FY 2020-21 to FY 2023-24as shown in the following Table:
Table 76: O&M Expense for Control Period as submitted by the Petitioner (Rs. Crore)
Employee Expenses 143.93 135.45 142.32 149.54
A&G Expenses 33.18 19.13 20.12 21.17
R&M Expenses 26.24 23.56 26.79 27.02
O&M Expenses 203.34 178.14 189.23 197.73
5.7.11 The Commission notes that, Regulation 31 (V) of TERC MYT Regulations, 2015
specifies the principle for O&M Expenses for Distribution. As per the said principle,
the employee expenses are linked to CPI inflation, A&G Expenses to WPI inflation
and R&M Expenses are linked to Gross Fixed Assets. The Commission determines
the normative O&M Expenses for Distribution Business for Control Period from FY
2020-21 to FY 2023-24as under:
5.7.12 The Commission in past Tariff Order dated 2 September, 2022 has adopted the

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principle for determination of normative O&M Expenses of distribution business and

approved the normative O&M Expenses for FY 2020-21 to FY 2022-23.
5.7.13 Hence, for the purpose of Truing up for FY 2020-21 and FY 2021-22, the
Commission approves the normative O&M expenses as approved in Tariff Order
dated 2 September, 2022. For FY 2022-23, the Commission approves the normative
O&M expenses as approved in Tariff Order dated 2 September, 2022.
5.7.14 However, the audited accounts for FY 2020-21 and FY 2021-22 is available with the
Commission whereby the Commission in this order is undertaking a true-up exercise
and therefore the normative O&M expenses and actual O&M Expenses is compared
for approval purpose. The Commission hereby approves the normative O&M
Expenses for FY 2020-21 and FY 2021-22. O&M Expenses being controllable factor,
the sharing of gains are undertaken in subsequent Section of this Chapter.
5.7.15 For FY 2022-23, for the purpose of Annual Performance review, the Commission
approves the normative expense for the year as per Tariff Order dated 2 September
2022. For FY 2023-24, the Commission has determined the normative expenses
based on similar principle followed for FY 2022-23 as the year is considered as
extension in MYT control Period and extended the parameters specified in Tariff
Regulations, 2015. The normative O&M expenses are determined as under:
(a) The base O&M Expenses are considered same as considered for FY 2022-23
and escalation has been considered on the expenses determined for FY 2022-
23.
(b) The increase in CPI and WPI is considered as 5.35% and 5.32% respectively as
considered for FY 2022-23 for computation of Employee expense and A&G
Expenses.
(c) K-factor has been considered as 3.36% as considered for FY 2022-23
5.7.16 In view of the above, considering the approved O&M expenses for FY 2020-21 and
FY 2021-22and applying the escalation of WPI and CPI Index as well as k Factor, the
O&M Expenses as approved by the Commission for transmission business is shown
in the following Table:
Table 77: O&M Expenses approved for FY 2020-21 to FY 2023-24 by the Commission (Rs.
Crore)
Employee Cost 164.55 173.35 182.62 192.39
A&G Cost 14.47 15.25 16.06 16.91
R&M Cost 23.36 23.37 23.86 26.31
Total 202.38 211.96 222.53 235.60
5.8 Depreciation
5.8.1 The Petitioner has submitted the detail regarding the Gross Fixed Assets and Asset

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wise calculation of Depreciation based on the account statements of the respective

years. The Petitioner has submitted the audited accounts for FY 2020-21 and FY
2021-22.
5.8.2 Further the Petitioner has submitted that the depreciation is calculated in the
following manner:
 full year depreciation on the opening balance of GFA;
 reduction of depreciation on assets which are fully depreciated;
 reduction of depreciation on assets created out of government grants;
5.8.3 Also, the deprecation rates to be charged on each class of assets is in line with the
“Annexure: 8” to the TERC MYT Regulations, 2015 and is highlighted below:
Table 78: Depreciation rate as per TERC MYT Regulations, 2015
Depreciation Rate
Asset
as per SLM
Land under full ownership 0.00%
Building 3.34%
Computer 15.00%
Furniture 6.33%
Vehicles 9.50%
5.8.4 TSECL has submitted that the gross asset base booked in account statements
includes assets created out of government grants. However, in accordance with
accounting procedures as well as regulatory practices in other states, depreciation on
such assets has not been claimed to be recovered through tariff and ARR. Further,
the assets which have completely depreciated have also been deducted from the
total gross value of assets shown in account statements for the purpose of
calculation of depreciation.
5.8.5 Based on the consideration of the above depreciation rate, the GFA added for FY
2020-21 and FY 2021-22 and the projected depreciation for FY 2022-23 and FY
2023-24 for the distribution business claimed by the Petitioner is outlined as below:
Table 79: GFA and Depreciation for Distribution Asset as submitted by Petitioner (Rs. Crore)
Opening GFA 680.76 681.05 687.59 767.59
Addition of GFA 0.29 6.54 80.00 360.00
Closing GFA 681.05 687.59 767.59 1,127.59
Average GFA 680.91 684.32 727.59 947.59
Depreciation 6.71 10.08 10.58 13.34
Avg. Dep. Rate 0.99% 1.47% 1.45% 1.41%
5.8.6 The Commission computed the depreciation as per Regulation 29 of TERC MYT
Regulations, 2015. The scheduled rates of depreciation have been considered as per
Annexure 8 to TERC MYT Regulations, 2015.

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5.8.7 As regards the addition of GFA, as per the data provided by the Petitioner, the actual
capitalisation during FY 2020-21 and FY 2021-22 is provided in the table below,
whereby the Petitioner has not submitted any documentary evidence regarding
theactual capitalisation of assets that have been actually put to use. The
Commission has not considered any capitalisation for FY 2022-23 and FY 2023-
24 based on the submission of TSECL.The Commission observed that the amount
of capitalisation is very abnormal with no consistency and no explanation has been
provided by the Petitioner for decapitalisation and capitalisation of assets for all the
years. Therefore, it is necessary to analyse the scheme wise details alongwith the
spill over of the CAPEX and its capitalisation. Accordingly, the Commission
directs the Petitioner to provide the scheme wise details of CAPEX,
Capitalisation and justification for any delay in commissioning of the asset at
the time of submission of final truing up in next tariff petition.
as proposed by the Petitioner.However, the Commission directs the Petitioner to
5.8.9 Further, for FY 2022-23 and FY 2023-24, the Commission has considered the
capitalisation as proposed by TSECL. However, the actual capitalisation shall be
allowed at time of truing up for respective years, subject to prudence check.
5.8.10 The capitalisation approved by the Commission for FY 2020-21 to FY 2023-24 is
shown in the following table:
Table 80: Approved Capitalisation of Assets for Distribution business (Rs. Crore)
Capitalisation of Assets 0.29 6.54 81.00 360.00
5.8.11 It is observed that despite several directions from the Commission in this regard, the
Petitioner has not complied with the Commission’s directive regarding submission of
Fixed Assets Register. As detailed in previous Orders, due to the absence of the
Fixed Assets and Depreciation register, it is difficult for the Commission to ascertain
the GFA value of the Petitioner. However, considering the audited account statement
which also follows the Straight Line Method for calculation of depreciation, the
Commission in absence of Fixed Assets Register, approves the depreciation in line
with the audited accounts for FY 2020-21 and FY 2021-22. Also, even though the
Petitioner has submitted in the petition that the depreciation claimed are as per
TERC MYT Regulations, 2015 on the gross asset value, whereas the accounts
specified SLM depreciation rate as per Companies Act, 2013, it has been observed
that TSECL has claimed the depreciation as per accounts only for truing up. The
same is also considered by the Commission for calculation of depreciation.
5.8.12 Further, the Commission has calculated the average rate of depreciation at the rates
applicable for various classes of assets as per TERC MYT Regulations, 2015. The

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average rate of depreciation is applied to arrive at the allowable depreciation. The

Commission has considered the calculation of depreciation based on the details
provided by TSECL in the Petition as well as in the replies to the data gaps. Also, the
opening balance of Gross Fixed Assets as on FY 2020-21 has been considered
equivalent to the closing balance approved by the Commission for FY 2019-20 in the
tariff order dated 2 September 2022.
5.8.13 Accordingly, the depreciation approved by the Commission for truing up of FY 2020-
21 and FY 2021-22 and for FY 2022-23 and FY 2023-24 is shown in the following
Table:
Table 81: GFA and Depreciation for Distribution Asset as approved by the Commission (Rs.
Crore)
Opening GFA 695.32 695.61 702.15 783.15
Addition during the year 0.29 6.54 81.00 360.00
Closing GFA 695.61 702.15 783.15 1,143.15
Avg. Dep. Rate 0.99% 1.47% 1.45% 1.41%
Depreciation 6.85 10.29 10.80 13.56
5.9 Interest and Finance Charges

5.9.1 TSECL has submitted that it has considered the following for total interest and
finance charges for FY 2020-21 and FY 2021-22 as outlined below:
 Interest on loans from REC and IPDS
 Loan processing fee
 Bank Commission for letter of credit
5.9.2 For MYT Control period, TSECL has taken some term loans under the Central
Government Schemes of RGGVY, DDUGJY, Soubhagya and IPDS. In addition to
this, the finance charges such as guarantee charge, bank commission for Letter of
Credit etc. have been shown under interest and finance charges.
5.9.3 The TSECL has taken loans from the PFC/REC/ Govt. of Tripura. The details about
the loan taken byTSECL is given below:
 Loan from PFC: The fund is released by PFC under various schemes. 100% of
the approved cost is provided as loan from the Government of India through
Gross Budgetary Support (GBS). The loan along with interest thereon shall be
converted into grant once the establishment of the required system is achieved
and verified by an independent agency appointment by Ministry of Power (MoP).
No conversion to grant will be made in case projects are not completed within 3
years from date of sanction of the project. In such case, TSECL will have to
bear full loan and interest repayment. As no interest payment and repayment
schedule is mentioned for PFC loan for the computation of interest and finance
charges in this petition no repayment of loan from PFC has been considered.
 Loan from REC: The fund is released by REC under RGGVY scheme. 90% of
the approved cost is provided as grant and remaining 10% as loan. This fund is

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not given directly to TSECL but is disbursed through Government of Tripura.

TSECL is paying interest on this loan on behalf of GoT in four quarterly
instalments. In the accounts, this loan is treated under head ‘GoT loan’. The
moratorium period of 5 years is provided on repayment of this loan. Since this is
not the loan given to TSECL and fund received on behalf of the GoT,
 Loan from Govt. of Tripura (GoT): The Government of Tripura loan is
disbursed as interest free loans from the state government under budgetary
Non-Plan consideration and to be repaid to the GoT under 30 equal instalments
within a period of 15 years as provided in Memorandum of the government of
Tripura dated 17th July 2009. The TSECL is persuading with the government of
Tripura to convert this interest free loan into equity portion. But, till it is
converted into equity the amount have been treated as loan.
 Loan from PNB (Earlier UBI): This is a working capital loan taken for the
payment of outstanding dues of NEEPCO and OTPC in FY 2016-17. Since this
is a working capital loan and the same has been claimed as per norms
separately, the same is not considered here in this petition.
5.9.4 The Interest and Finance Charges submitted by TSECL for FY 2020-21 and FY
2021-22are on actual basis and are projected for FY 2022-23 and FY 2023-24as
outlined in the table below:
Table 82: Interest and Finance Charges for FY 2020-21 to FY 2023-24– submitted by TSECL
(Rs. Crore)
Interest on REC loan for RGGVY
0.75 0.02 0.42 0.42
@average rate of 10.5%
Interest on IPDS loan @average rate of
1.79 1.26 1.26 1.26
11.067%
Interest on Soubhagaya Loan (10.75%
3.00 1.80 1.62 1.62
quarterly and 10.66% Monthly)
Interest for DDUGJY(10.75% quarterly and
0.57 3.48 3.48 3.75
10.66% Monthly)
Bank Commission for Letter of Credit 0.62 0.62 0.62
Loan Processing Fees 1.31 - - -
Total Interest & Finance Charges 7.41 7.18 7.41 7.67
5.9.5 TSECL has submitted the claim in relation to interest on REC loan for truing up year
of FY 2020-21 and FY 2021-22. It has been observed that TSECL has claimed only
the part of the interest amount pertaining to REC loan as compared to the total
interest amount highlighted in audited accounts. However, TSECL has not provided
any supporting or documentary evidence for the said interest amount even after the
same was sought by the Commission.
5.9.6 Also, with regards to the projection of interest on loan, no details has been provided
by TSECL on the IPDS, Saubhagya and DDUGJY loan and just provided the loan
profile of the same. No justification or supporting document has been provided by
TSECL. The Scheme such as IPDS, Saubhagya and DDUGJY has been funded

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through grants and loan amount and the details of which are necessary to allow such
claims. Therefore, TSECL is directed to provide the overall details of the
scheme highlighting the total capex amount, activities to be undertaken under
such scheme, phasing of the capitalisation, funding pattern and interest
liability for overall period of the scheme, in the next tariff petition.
5.9.7 Also, for the amount claimed for FY 2020-21 to FY 2021-22, eventhough no details
have been provided by TSECL and mere loan profile statement has been provided,
the Commission understands that such schemes are envisaged to be undertaken for
improvement of the distribution system and is a need for the Power development
within the State. Therefore, the Commission approves the amount as submitted by
TSECL
5.9.8 Further, the Commission approves the interest amount projected by TSECL for FY
2022-23 and FY 2023-24 with direction to provide all justification alongwith the
supporting documents and the break-up of the interest cost as per different sources
in next tariff petition.
5.9.9 Accordingly, the Commission approves the interest and finance charges as submitted
by TSECL for Distribution business, after due prudence check with audited accounts
for FY 2020-21 and FY 2021-22 and projection for FY 2022-23and FY 2023-24 as
outlined below:
Table 83: Interest and Finance Charges for FY 2020-21 to FY 2023-24 approved by Commission
(Rs. Crore)
Interest on REC loan for RGGVY
0.75 0.02 0.42 0.42
@average rate of 10.5%
Interest on IPDS loan @average rate of
1.79 1.26 1.26 1.26
11.067%
Interest on Soubhagaya Loan (10.75%
3.00 1.80 1.62 1.62
quarterly and 10.66% Monthly)
Interest for DDUGJY(10.75% quarterly and
0.57 3.48 3.48 3.75
10.66% Monthly)
Bank Commission for Letter of Credit 0.62 0.62 0.62
Loan Processing Fees 1.31 - - -
Total Interest & Finance Charges 7.41 7.18 7.41 7.67

5.10.1 The Petitioner has submitted that the TERC MYT Regulations, 2015 provides for
normative interest on working Capital based on the methodology outlined in the
Regulations. Accordingly, the Petitioner is eligible for interest on working capital
worked out on methodology specified in the Regulations for Distribution business as
provided below:

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5.10.2 Also, in accordance with the TERC MYT Regulations, 2015, the interest on the
working capital requirement considered is SBI Base Rate plus 300 basis points as on
1stApril of the year for which tariff is determined.
5.10.3 Accordingly, the Petitioner in accordance with TERC MYT Regulations, 2015, has
calculated the interest on working capital for Distribution business as shown in the
table below:
Table 84: Interest on Working Capital as submitted by Petitioner for Distrbution (Rs. Crore)
Rate of Interest (%) 11.15% 10.40% 10.55% 12.40%
5.10.4 The Commission has computed the interest on working capital as per principles
specified in TERC MYT Regulations, 2015. Further, Regulation 30 of TERC MYT
Regulations, 2015 specifies for consideration of fixed cost for computation of
receivables. As per Regulations 31 (III) of TERC MYT Regulations 2015, the interest
rate for computing IoWC is considered as the weighted average SBI Base plus 300
basis points as on 1st April of the year for which tariff is determined.In view of the
above, interest on working capital for Distribution business approved for FY 2020-21
to FY 2023-24is shown in the following Table:
Table 85: Interest on working Capital for distribution business as approved by the Commission
(Rs. Crore)
Rate of Interest (%) 11.15% 10.40% 10.55% 12.40%
5.11 Return on Equity and Tax on Return on Equity

5.11.1 The Petitioner submitted that the Regulation 26 of the TERC MYT Regulations, 2015
specifies for Return on Equity (RoE) @15.5% on equity base.
“26. Return on Equity:

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Return on equity shall be computed in rupee terms, on the equity base

determined in accordance with Clause 21.
Return on equity shall be computed at the base rate of 15.50% for thermal
generating stations, transmission/distribution system including communication
system and run of the river hydro generating station, and at the base rate of
16.50% for the storage type hydro generating stations and run of river generating
station with pondage:”
5.11.2 Further, it has submitted that the amount of equity base to be considered for
calculation of return has been considered based on the relevant Regulations 21 of
TERC MYT Regulations, 2015.
“21. Debt-Equity Ratio:
I. For a project declared under commercial operation on or after the date of

publication of this regulation on the Official Gazette, the debt-equity ratio would
be considered as 70:30 as on COD. If the equity actually deployed is more than
30% of the capital cost, equity in excess of 30% shall be treated as normative
loan:
Provided that:
i. where equity actually deployed is less than 30% of the capital cost, actual equity
shall be considered for determination of tariff:
ii. the equity invested in foreign currency shall be designated in Indian rupees on
the date of each investment:
iii. any grant obtained for the execution of the project shall not be considered as a
part of capital structure for the purpose of debt : equity ratio.”
5.11.3 Also, the Petitioner has stated that the Commission in its past orders had considered
equity base for the transmission and distribution business as 30% of the Gross Fixed
Asset Value and as such the same is considered here for the purpose of calculation
of RoE.
5.11.4 Accordingly, the Equity fund of TSECL is calculated after allocating equity fund of
TPECL in the Gross fixed assets ratio among generation, transmission and
distribution business. After that equity fund of distribution business is allocated based
on gross fixed assets ratio
5.11.5 Based on the above submission, the Return on Equity claimed by the Petitioner is
outlined in the Table below:
Table 86: Calculation of RoE on Pre-tax basis as per TSECL (Rs. Crore)
Average GFA 680.90 803.00 843.00 1,063.00
Rate of Return (%) 15.50% 15.50% 15.50% 15.50%
Return on Equity 31.66 37.34 39.20 49.43

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accounts.
Table 87: Equity Base for Distribution for FY 2020-21 to FY 2023-24 approved by the
FY 2020- FY 2021- FY 2022- FY 2023-
Particulars
21 22 23 24
GFA 1,513.66 1,530.54
CWIP 905.13 1,097.26
Capital Grant 1,301.24 1,423.95
Calculation of Equity Base of Transmission Business
Opening GFA 695.32 695.61 702.15 783.15
Closing GFA 695.61 702.15 783.15 1,143.15
Average 695.47 698.88 742.65 963.15
5.11.10 Based on the approach as adopted by the Commission, the approved Equity
base of Distribution business is considered for calculation of Return on Equity. Since,
no tax payment is considered for FY 2020-21 and FY 2021-22, the Commission has
considered the rate of Return on Equity as 15.50% as per TERC MYT Regulations,
2015.
5.11.11 The approved Return on Equity is calculated as per Regulations 26 and 27 of

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TERC MYT Regulations, 2015 and is outlined in the following table:

Table 88: Return on Equity for Control Period for DistributionBusiness as approved by the
Rate of Return (%) 15.50% 15.50% 15.50% 15.50%
Return on Equity 14.94 14.89 15.82 20.52

5.12.1 TSECL submitted that the other income of TSECL covers mainly interest earned on
fixed deposits made in various banks and as detailed under the head above, and
other miscellaneous income like sale of scrap, sale of tender, meter rent, etc. These
incomes are being separately booked under other income category.
5.12.2 TSECL submitted the Non-tariff income for distribution business for FY 2020-21 to
FY 2023-24 as shown in the following Table:
Table 89: Non-Tariff Income as per Petitioner for FY 2020-21 to FY 2023-24(Rs. Crore)
Non-tariff Income 27.48 44.59 44.59 44.59

required to be deducted to arrive at the Annual Fixed Charges of the Distribution
business.
Income without providing break-up of the same component wise and has reconciled
the same with the available audited. The Commission, as per the approach adopted
in previous Orders, approves the Non-Tariff Income of Distribution function as
proposed by the Petitioner for the purpose of truing up of FY 2020-21 and FY 2021-
22.
5.12.5 For FY 2022-23 and FY 2023-24, the Commission approves the Non-tariff income
equivalent to approved for FY 2021-22. The same shall be allowed on actual basis at
time of truing up, subject to prudence check.
5.12.6 Accordingly, the Non-tariff income approved by the Commission is shown in the
following Table:
Table 90: Non-Tariff Income for FY 2020-21 to FY 2023-24approved by the Commission (Rs.
Crore)
Non-tariff Income 27.48 44.59 44.59 44.59

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5.13 Sharing of Controllable Factor

5.13.1 Regulation 10 (VI) of TERC MYT Regulations, 2015 specifies the controllable
parameters for distribution business, which includes the O&M Expenses, Interest on
Working Capital and T&D Losses. Further, Regulation (VII) of TERC MYT
Regulations, 2015 specifies the treatment of such controllable parameter on account
of sharing of efficiency gains and losses as under:
“The financial gains by a generating company or the Transmission or the
Distribution licensee, on account of controllable parameters shall be shared
between generating company or the Transmission or the Distribution licensee
and the beneficiaries on monthly basis with annual reconciliation. The financial
gains computed shall be shared in the ratio of 60:40 between generating
company or the Transmission or the Distribution licensee as the case may be,
and the beneficiaries.”
O&M Expenses
5.13.2 As per Regulations 10 (VI) (I) (i) of MYT Regulations 2015, the variation in O&M
expenses will be considered as a Controllable parameter for distribution business
and only financial gain has to be shared with the consumers in the ratio of 60:40 as
per Regulation 10 (VI) of TERC MYT Regulations, 2015. However, with respect to
any loss, the same has to be borne by the licensee due to their inefficiencies.
5.13.3 The Commission in earlier Section of this Order has allowed O&M Expenses on
normative basis. Since audited accounts for FY 2020-21 and FY 2021-22are
available, the Commission has considered the sharing of gains for O&M Expenses. It
is observed that actual O&M expenses for FY 2021-22 are lower than normative
expenses. Hence, the Commission has considered the sharing of gains for FY 2021-
22 and such sharing of gains shall be deducted from the allowed normative expenses
so as to share with the consumers.
5.13.4 The sharing of gains for O&M expenses as shown in the following Table
Table 91: Sharing of efficiency gains for Interest on Working capital for Distribution for FY
2020-21 and FY 2021-22 (Rs. Crore)
Sharing Sharing
Gain / Normati Gain /
Normative Actual of Gain / Actual of Gain /
(Loss) ve (Loss
(loss) (loss)
O&M
202.38 202.90 (0.52) - 211.96 191.56 20.40 8.16
expenses
Interest on Working capital
5.13.5 As per Regulations 10 (VI) (I) (f) of MYT Regulations 2015, the variations in working
capital requirements will be considered as a Controllable parameter for distribution

_________________________________________________________________________
business and only financial gain has to be shared with the consumers in the ratio of
60:40 as per Regulation 10 (VI) of TERC MYT Regulations, 2015.
5.13.6 The Commission in earlier Section of this Order has allowed Interest on Working
capital on normative basis. Since audited accounts for FY 2020-21 and FY 2021-
22are available, the Commission has considered the sharing of gains for Interest on
Working capital comparing the normative and actual interest on working capital loan.
However, TSECL has not provided any bifurcation of the interest on loan as reflected
in the audited accounts and therefore the Commission would like to show its
discontentment on the approach of TSECL and the data quality. Also, TSECL did not
submit the details of any actual interest on working capital loans for FY 2020-21 and
FY 2021-22 in response to the query of the Commission. Hence, the Commission
has considered the actual interest on working capital as Nil and undertaken the
sharing of gains. Such sharing of gains shall be deducted from the allowed normative
expenses so as to share with the consumers.
5.13.7 Based on the above, the Commission has considered the sharing of gains for Interest
on Working capital as shown in the following Table:
Table 92: Sharing of efficiency gains for Interest on Working capital for Distribution for FY
2020-21 and FY 2021-22(Rs. Crore)
Sharin
Sharing
Gain / g of Gain /
Normative Actual Normative Actual of Gain /
(Loss) Gain / (Loss
(loss)
(loss)
Interest on
16.94 - 16.94 6.77 17.32 - 17.32 6.93
working Capital
T&D Losses
5.13.8 Further, the Commission notes that, actual T&D losses for TSECL are much higher
than target specified for the respective financial year. Hence, the Commission
decides to reduce the power purchase cost on account of higher T&D losses. Hence,
the Commission disallows the power purchase cost for FY 2020-21 and FY 2021-22
for truing up purpose. Based on the approved own generation, sales and energy
balance for FY 2020-21 and FY 2021-22, the Commission has computed additional
energy purchase as shown in the following table:
Table 93: Additional Energy purchase on account of increase in T&D losses for FY 2020-21 and
FY 2021-22 (in MU)
Sl.
Particulars Derivation FY 2020-21 FY 2021-22
No.
1 Energy sales within State A 982.33 1,099.22
2 Target T&D Loss B 20.00% 20.00%
3 Target Energy at State Bus C = A / (1-B) 1,227.91 1,374.02
Actual Energy purchased at State
4 D 1,461.76 1,553.82
Periphery as given in Energy Balance
5 Additional Energy Purchase E=D-C 233.85 179.79

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5.13.9 Accordingly, the Commission has computed the cost towards such additional energy
purchase for FY 2020-21 and FY 2021-22and the same is disallowed from the ARR
approved for these years as shown in the following Table:
Table 94: Cost of additional energy purchase for FY 2017-18 to FY 2020-21
Particulars Units Derivation FY 2020-21 FY 2021—22
Fuel cost Rs. Crore A 130.12 160.18
Net energy generated (from fuel based
MU B 534.21 563.65
plants)
Total Power Purchase cost Rs. Crore C 988.37 1,108.23
Total power purchase quantum MU D 2,399.73 2,625.48
Total fuel and power purchase cost Rs. Crore E=A+C 1,118.48 1,268.41
Total energy quantum (own generation
from fuel-based plants + power F=B+D 2,933.94 3,189.13
purchase) MU
Average fuel and power purchase cost Rs./kWh G=(Ex10)/F 3.81 3.98
Additional energy purchase MU J 233.85 179.79
Cost of additional energy purchase Rs. Crore K = IxJ/10 89.15 71.51
5.14 Summary of ARR for FY 2020-21 to FY 2023-24

5.14.1 The Commission has approved the Annual Revenue Requirement for each Year of
the MYT Control Period i.e.,from FY 2020-21 to FY 2022-23 vide order dated 02
September 2022 as outlined below:
Table 95: Aggregate Revenue Requirement for Distribution Business approved for FY 2020-21
to FY 2022-23 in Tariff Order dated 02.09.2022 (Rs. Crore)
Approved in Tariff Order dated 02
Sr. September 2022
Particulars
No. FY 2020- FY 2021- FY 2022-
21 22 23
1. Power Purchase Cost 988.37 1,086.42 958.56
2. Inter State Transmission Charges 51.93 135.44 137.40
3. Intra State Transmission Charges 32.88 34.21 35.84
4. Cost of State own/ TSECL Generation 227.50 256.12 503.30
5. O&M Expenses 202.38 211.96 222.53
6. Depreciation 7.39 7.51 7.66
7. Interest on Term Loans & Fin. Charges 7.41 6.49 6.17
8. Return on Equity 19.12 19.33 19.63
9. Interest on Working Capital 16.94 16.88 19.38
Reduction in power purchase onaccount of higher T&D
10. (83.05) - -
Losses
11. Gross ARR 1,470.86 1,774.35 1,910.46
Less: Non‐Tariff Income (Excluding Government
12. 30.04 33.88 43.80
Grant)
13. Net ARR 1,440.82 1,740.47 1,866.67

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undertaken the truing up exercise for FY 2020-21 and FY 2021-22as elaborated
above in accordance with the tariff Regulations and justification, the Commission
approves the Aggregate Revenue requirement of Distribution business.
5.14.3 Considering the FY 2020-21 and FY 2021-22, since the audited accounts were
available, the Commission has calculated sharing of gains on the controllable factor
as specified in Regulations 10 (VII) of MYT Regulations 2015.
5.14.4 Also, as specified in Regulations 10 (VI) (i) (e) of MYT Regulations, 2015, the
Commission has disallowed the power purchase cost proportionate to incremental
T&D loss for FY 2020-21 and FY 2021-22.
2023-24 along with Annual Performance Review for FY 2022-23 based on approval
of various ARR Components, as elaborated above in accordance with the tariff
Regulations and justification.
5.14.6 Based on the above analysis, the submitted and approved Aggregate Revenue
Requirement for FY 2020-21 to FY 2023-24 is shown in the Table below:

________________________________________________________________________________________________________________
Table 96:Aggregate Revenue Requirement for FY 2020-21 to FY 2023-24 of Distribution business approved by the Commission (Rs. Crore)
TSECL Petition Approved by the Commission
Sr.
Particulars FY 2023- FY 2023-24
No. FY 2020-21 FY 2021-22 FY 2022-23 FY 2020-21 FY 2021-22 FY 2022-23
24
1. Power Purchase Cost 990.23 1,118.38 1,117.38 1,239.43 988.37 1,108.23 1,082.70 1,218.59
2. Inter State Transmission Charges 52.24 142.92 123.22 126.91 51.93 142.92 124.43 116.64
3. Intra State Transmission Charges 47.02 61.09 53.91 59.12 29.81 30.66 32.64 33.86
4. Cost of State own/ TSECL Generation 183.68 211.58 475.41 611.13 166.02 198.06 379.14 494.16
5. O&M Expenses 202.90 191.56 206.80 237.27 202.38 211.96 222.53 235.60
6. Depreciation 6.71 10.08 10.58 13.34 6.85 10.29 10.80 13.56
7. Interest on Term Loans & Fin. Charges 7.41 7.18 7.41 7.67 7.41 7.18 7.41 7.67
8. Return on Equity 31.66 37.34 39.20 49.43 14.94 14.89 15.82 20.52
9. Interest on Working Capital 18.35 19.25 28.00 38.99 16.94 17.32 20.61 26.70
Reduction in power purchase on account of
10. - - - - (89.15) (71.51) - -
higher T&D Losses
11. Sharing of (Gains) - - - - (6.77) (15.09) - -
12. Gross ARR 1,540.18 1,799.37 2,061.92 2,383.29 1,388.72 1,654.91 1,896.08 2,167.31
Less: Non‐Tariff Income (Excluding Government
13. 27.48 44.59 44.59 44.59 27.48 44.59 44.59 44.59
Grant)
14. Net ARR 1,512.70 1,754.78 2,017.33 2,338.70 1,361.25 1,610.32 1,851.49 2,122.72

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5.15 Revenue from Sale of Power

Revenue from Intra-State sales
5.15.1 TSECL supplies power both within the State to the consumers of Tripura at the retail
supply tariff notified by TERC as well as to other States based on bilateral contracts
or surplus availability from time to time. Also, the power within Tripura is completely
met (except during peak period) before supplying the surplus power to other States.
5.15.2 TSECL has submitted the detailed break-up of the actual revenue for FY 2020-21
and FY 2021-22. The revenue for FY 2022-23 and FY 2023-24 has been projected
based on the average existing tariff of FY 2022-23multiplied by total sales as per the
Energy Balance table. The revenue submitted by the Petitioner is shown in the
following Table:
Table 97: Revenue for FY 2020-21 to FY 2023-24(Rs. Crore)
Revenue from Intra-State
573.80 648.02 613.07 628.74
Sale of Power
Revenue from Inter-State sales
5.15.3 The Petitioner has been selling power to the States of Manipur and Mizoram and
Export to Bangladesh which is considered as inter-State sale of power.
5.15.4 The actual revenue from such inter-state sales has been submitted by Petitioner for
FY 2020-21 and FY 2021-22. For FY 2022-23 and FY 2023-24, the same has been
projected based on escalation as shown in the following Table:
Table 98: Revenue from Inter-State sales from FY 2020-21 to FY 2023-24(Rs. Crore)
Sale of Power MUs 1,456.13 1,556.45 1,671.25 1,969.73
Revenue from Sale of Power Rs. Crore 809.50 858.12 900.31 997.94
Revenue Subsidy from Government of Tripura
5.15.5 TSECL has claimed subsidy received from Government of Tripura as Income.
TSECL has claimed the actual Revenue as per the audited accounts of FY 2020-21
and FY 2021-22.
5.15.6 Further TSECL submitted that the projected figure is based on the budget estimated
of State Government to provide subsidy in the existing tariff regime.
Table 99: Revenue subsidy from FY 2020-21 to FY 2023-24 (Rs. Crore)
Revenue Subsidy 54.21 54.30 50.00 50.00

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5.15.7 Based on the revenue from sale of Intra-State and Inter-State Power as well as
Revenue from Subsidy from Government of Tripura, the total revenue claimed by
Petitioner for FY 2020-21 to FY 2023-24is outlined in the table below:
Table 100: Total Revenue from FY 2020-21 to FY 2023-24as per Petitioner (Rs. Crore)
Revenue from Intra-State Sale of Power 573.80 648.02 740.76 818.04
Revenue subsidy 54.21 54.30 50.00 50.00
Revenue from Inter-State Sale of Power 809.50 858.12 900.31 997.94
Total Revenue 1,437.51 1,560.44 1,691.07 1,865.98
5.15.8 The Commission notes that audited annual accounts for FY 2020-21 and FY 2021-
22are available. Hence, the Commission has considered the revenue from inter-state
sale of power, intra-state sale of power and revenue from government subsidy based
on audited annual accounts for the respective years.
5.15.9 With respect to Revenue from Intra-State Sales, for FY 2022-23 and FY 2023-24, the
Commission has recomputed the Revenue on the sales approved in this order,
based on the existing tariff as approved in previous tariff order.
5.15.10 With respect to Revenue from Inter-State Sales, as regards to FY 2022-23
and FY 2023-24, the Commission has considered the sales approved in the Energy
balance of this Chapter as submitted by TSECL. The rate of sale of power to
Bangladesh, Manipur and Mizoram has been considered based on the existing
contract entered by TSECL. Further, the rate of sale of power for IEX has been
considered based on prevailing market prices.
5.15.11 The revenue from government subsidy has been considered as submitted by
the Petitioner. In view of the above, the revenue from sale of power considered by
the Commission for the Control period is shown in the following Table:
Table 101: Total Revenue from FY 2020-21 to FY 2023-24approved by the Commission (Rs.
Crore)
From Intra-State Sale of Power 573.80 648.02 786.25 869.48
Revenue subsidy 54.21 54.30 50.00 50.00
From Inter-State Sale of Power 809.50 858.12 990.89 1,160.57
Total Revenue 1,437.51 1,560.44 1,827.15 2,080.05
5.16 Revenue Gap/(surplus)

5.16.1 TSECL has considered the revenue gap at existing tariff. Further the gap is

_________________________________________________________________________
calculated considering the revenue from retail and bulk sales and the total cost of
distribution business for the respective FY 2020-21 to FY 2023-24.
5.16.2 Based on the proposed Aggregate Revenue Requirement and total Revenue for FY
2020-21 to FY 2023-24, TSECL has proposed the revenue gap as shown in Table
below:
Table 102: Revenue Gap/(Surplus) for FY 2020-21 to FY 2023-24considered by the TSECL (Rs.
Crore)
Net ARR 1,512.70 1,754.78 2,017.33 2,338.70
Less: Total Revenue 1,437.51 1,560.44 1,691.07 1,865.98
Revenue Gap/(surplus) 75.19 194.34 326.26 472.72
Gap/(Surplus) already considered 3.31 (46.65) - -
Net Revenue Gap/(Surplus) 71.89 240.99 326.26* 472.72
*-calculation error by not considering the Gap already considered in past order of Rs.
79.28 Crore
5.16.3 The Total Revenue gap as proposed by TSECL, based on the revised submission
considering the replies to data gaps, including the approved regulatory asset pending
for liquidation as per past orders is outlined as below:
Table 103: Total Revenue Gap considered by TSECL (Rs. Crores)
Sl.
Particulars Amount
No.
1 ARR for FY 2023-24 2,338.70
2 Revenue from Sale of Power 1,865.98
3 Gap/(surplus) 472.72
4 Approved Regulatory Asset as per Tariff Order FY 2022-23 60.43
5 Carrying cost on above said Regulatory asset @12.40% 7.49
6 True-up for FY 2020-21 71.89
7 True-up for FY 2021-22 240.99
8 Provisional True-up for FY 2022-23 247.08
9 Total Gap /(surplus) 1,100.59
5.16.4 Based on the approvedAggregate Revenue Requirement and total Revenue for FY
2020-21 to FY 2023-24, the Commission determines the revenue gap as shown in
Table below:
Table 104: Revenue Gap/(Surplus) for FY 2020-21 to FY 2023-24approved by Commission (Rs.
Crore)
Net ARR 1,361.25 1,610.32 1,851.49 2,122.72
Less: Total Revenue 1,437.51 1,560.44 1,827.15 2,080.05
Revenue Gap/(surplus) (76.27) 49.88 24.34 42.67

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Gap/(Surplus) already considered 3.31 (46.65) 79.28 -
Net Revenue Gap/(Surplus) (79.57) 96.53 (54.94) 42.67
5.16.5 The Commission has computed the carrying cost considering the present revenue
gap and revenue gap already considered in previous Tariff Order. Accordingly, the
Commission has recalculated the carrying cost, based on the standalone gap
approved in this order:
Table 105: Calculation of Carrying cost as approved by Commission (Rs. Crores)
Opening Gap - (79.57) 16.96 22.45
Addition (79.57) 96.53 5.49 42.67
Recovery - - - 65.12
Closing Gap (79.57) 16.96 22.45 -
Rate of Interest (%) 11.15% 10.40% 10.55% 12.40%
Carrying cost (4.44) (3.26) 2.08 1.39
Total Carrying cost (4.22)
5.16.6 Accordingly, the Total Revenue gap approved by the Commission, including the
approved regulatory asset as per past orders, is outlined as below:
Table 106: Total Revenue Gap including Past Regulatory assets approved by Commission (Rs.
Crores)
Sr.
Particulars Petition Analysis
No
1 ARR for FY 2023-24 2,338.70 2,122.72
2 Revenue from Sale of Power 1,865.98 2,080.05
3 Gap/(surplus) 472.72 42.67
4 Approved Regulatory Asset as per Tariff Order FY 2022-23 60.43 60.43
5 Carrying cost on above said Regulatory asset @12.40% 7.49 -
6 True-up for FY 2020-21 71.89 (79.57)
7 True-up for FY 2021-22 240.99 96.53
8 Provisional True-up for FY 2022-23 247.08 (54.94)
9 Carrying cost - (4.22)
10 Total Gap /(surplus) (A) 1,100.59 60.89
11 ARR for FY 2023-24 2,338.70 2,122.72

12 Less: Revenue from Inter-State Sales 997.94 1,160.57
13 Less: Revenue from Subsidies 50.00 50.00
14 Net ARR for determination of Tariff (B) 1,290.76 912.15
15 Less: Revenue at existing Tariff 818.04 869.48
16 Revenue Gap/(surplus)(C) 472.72 42.67
17 Consolidated ARR including Past revenue Gaps (A)+(B)- (C) 1,918.63 930.37
5.16.7 The treatment of this revenue gap is elaborated in the subsequent chapter of this
Order.

_________________________________________________________________________
6 Directives of the Commission
6.1.1 The Commission in the last tariff order dated September 02, 2022 has issued
multiple directions to TSECL. TSECL, in its Tariff Petition has not submitted any
compliance status of the directives given by the Commission.
6.1.2 The Commission directs TSECL to submit the compliance status of the directives
given by the Commission in order dated September 02, 2022within 3 months of the
date of the order. Failure to comply with the directions of the Commission will compel
to take appropriate action as per provision of the Act.
6.1.3 The Commission issues following directions for compliance by TPGL and TSECL
6.1.3.1 TPGL should immediately work out for improvement of performance of existing
power plants to avoid any shortages as demand is growing up rapidly in the state of
Tripura. The Commission feels that TPGL should work as a commercial utility as
the power rates in open markets are touching roof of caps and can take advantage
of the same. The Commission further notes that hydro power which is installed for
40 years back can have a new life with R&M. The hydro power is the cleanest
power and the GHPP need to be brought back with full stream as to avoid purchase
of costly power from the market.
6.1.3.2 The Commission hereby directs all three Companies to independently work so that
consumers get quality of power besides reliability for which consumer rightfully
expects to get the economical services in lieu of the payments and also in the
reliability and efficiency.
6.1.3.3 There should be a consumer awareness programmes periodically for energy

economic efficiency and conservations. Tripura uses bulk of its power for lighting
and fan loads and therefore safe use of the system is also to be one of the priorities
for the service providers. Electrical inspectors should also inspect regularly to avoid
fatalities/injuries due to electrical accidents.
6.1.3.4 The Commission is setting up one monitoring cell for Consumer Grievances for pro-
active interactions with stakeholders.

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7 Tariff Principles and Design
7.1 Tariff Proposal for FY 2023-24

Petitioner’s submission
7.1.1 TSECL submitted the cumulative revenue gap of Rs. 1100.60 Crore for FY 2023-
24.TSECL submitted that the revenue at existing tariff would not be sufficient enough
to meet the annual revenue requirement of each of the years during control period.
Besides, when the revenue gap carried over from previous years is considered, it
becomes imperative that there is a need to increase the existing tariff to make it
sufficient enough to meet the requirement and recover the pending gap of past years
which has accumulated over the past few years.
7.1.2 Since this is a high amount calculated and includes gap of a long period of more than
10 years, TSECL has not proposed the exact tariff hike at this stage since the
quantum of approved gap over such a long periodcannot be estimated at this stage.
However, in order to give an idea of the tariff hike that may be required, TSECL is
showing the average time taken to recover the proposed gap in different scenarios of
tariff hike.
7.1.3 The Commission is requested to consider one of these scenarios depending upon
the approved amount of regulatory assets and an appropriate time period considered
justified:
Table 107: Scenario proposed by Petitioner to recover Revenue Gap

10% average 20% average 30% average
Particulars Scenarios hike across hike across all hike across all
all categories categories categories
Additional Revenue at Proposed
81.8 163.6 246.4
Tariff in FY 2023-24
Time Taken for Bridging

years 13.45 6.72 4.5
Regulatory Gap
7.1.4 The Commission in this Order has undertaken the truing up for FY 2020-21 and FY
2021-22 and APR for FY 2022-23 and computed the revenue gap arising out of such
truing up. Such revenue gap has been carried forward to consider for recovery during
FY 2023-24.
7.1.5 Further, the Commission has determined the Aggregate Revenue Requirement for
FY 2023-24. The revenue gap/(surplus) for the said period is determined in the
previous Chapter of this Order. Such revenue gap/(surplus) has been carried forward
and mechanism of the recovery of the same is described in the subsequent section
of this order.
7.1.6 The cumulative revenue gap approved by the Commission for FY 2023-24 as Rs.

_________________________________________________________________________
60.89 Crore as described in the previous Chapter.

7.1.7 For full recovery of this Gap, there would be increase in consumer tariff by 7%. The
Commission decides to recover this revenue gap through adequate tariff hike in fixed
charges and energy charges. The Commission does not intend to create any
regulatory asset and allows TSECL to recover this gap through the increase in tariff.
7.1.8 Accordingly, the Commission approves the Average Cost of Supply for FY 2023-24
as shown in the following Table:
Table 108: Average Cost of Supplyfor FY 2023-24 approved by the Commission
Sl. Approved for
Particulars
No. FY 2023-24
Net ARR for FY 2023-24 for recovery through Tariff (excluding
1 930.37
Revenue from Inter-State sale) (Rs. Crore)
2 Average Cost of Supply (Rs./kWh) 6.94
7.1.9 The Commission has considered the category wise tariff increase for fulfilling the
total tariff hike of 7%. The Commission has attempted for rationalizing tariff hike
across all categories. The proposed tariff for FY 2023-24 is discussed in subsequent
part of this Chapter.
7.2 Wheeling Charges

Petitioner’s submission
7.2.1 No submission has been made by TSECL with respect to Wheeling Charges.
7.2.2 TERC MYT Regulations, 2015 specifies that distribution licensee should segregate
the accounts of licensed business into wheeling business and retail supply business.
The Commission notes that neither TSECL has not segregated its account in
wheeling and retail supply business nor proposed any wheeling charges computation
in the Petition. Such lackluster approach may not be appreciable and it is directed to
TSECL to provide the complete tariff petition as per the provisions of the MYT
Regulations, as applicable.
7.2.3 Considering the approach as adopted in the last tariff order, the Commission
considers the similar allocation matrix which are also specified in other SERC’s Tariff
Regulations whereby the ARR has been segregated into wheeling and retail supply
business based on this allocation matrix and wheeling charges has been determined
thereafter. The Allocation matrix considered by the Commission is outlined in the
following table:

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Table 109: Allocation Matrix for segregation of Wire and Supply business
Sl. Allocation Ratio

Particulars Retail
No. Wire
Supply
1 Power Purchase Cost 0% 100%
2 Inter State Transmission Charges 0% 100%
3 Employee Cost 60% 40%
4 A&G Expenses 50% 50%
5 R&M Expenses 90% 10%
6 Depreciation 90% 10%
7 Interest and Finance Charges 90% 10%
8 Return on Equity 90% 10%
9 Interest on Working Capital 10% 90%
10 Less: Non‐Tariff Income 0% 100%
7.2.4 Accordingly, the Commission segregated the ARR approved for Distribution business
for FY 2023-24into ARR for Wheeling business and retail supply business. Further,
as regards cost of generation, the Commission has considered this cost as part of
power purchase cost and allocated to retail supply business only. The segregated
ARR for FY 2023-24approved by the Commission is shown in the following Table:
Table 110: Segregation of ARR for Distribution Business as approved by the Commission (Rs.
Crore)
ARR- FY 2023-24
Sl.
Particulars Retail
No. Wire Total
Supply
1 Power Purchase Cost - 1,218.59 1,218.59
2 Inter State Transmission Charges - 116.64 116.64
3 Intra State Transmission Charges 33.86 - 33.86
4 Cost of State own/ TSECL Generation - 494.16 494.16
5 Employee Cost 115.43 76.95 192.39
6 A&G Expenses 8.46 8.46 16.91
7 R&M Expenses 23.68 2.63 26.31
8 Depreciation 12.20 1.36 13.56
9 Interest and Finance Charges 6.91 0.77 7.67
10 Return on Equity 18.47 2.05 20.52
11 Interest on Working Capital 2.67 24.03 26.70
12 Gross ARR 221.67 1,945.64 2,167.31
13 Less: Non‐Tariff Income (Excluding Government Grant) - 44.59 44.59
14 Net ARR 221.67 1,901.05 2,122.72
7.2.5 Further, for computation of wheeling charges, the Commission approves the
wheeling charges for FY 2023-24as shown in the following Table:

_________________________________________________________________________
Table 111: Wheeling Charges for FY 2023-24as approved by the Commission

Sl. No. Particulars UoM FY 2023-24
1 Distribution Cost Rs. Crore 221.56
2 Total Energy input into Distribution System MU 1,626.19
Distribution cost for wires business for 33 kV voltage
3 Rs. Crore 77.54
level (assuming 35% of cost at 33 kV)
4 Wheeling Charges Rs./kWh 0.48
7.2.6 The Wheeling charges determined above are applicable for use of the distribution
system of TSECL by other licensees or generating companies or captive power
plants or consumers/users who are permitted open access at 33 kV voltage level
under relevant regulations of the Commission.
7.3 Cross Subsidy

7.3.1 An element of cross-subsidy is inherent in the present tariff structure. The
Commission has continued with the tariff approved in previous Tariff Order. The
tariffs of different consumer categories in relation to the approved ACoS is such that
the tariffs for some categories of consumers are higher than the ACoS while the
tariffs for other categories are lower than the ACoS.
7.3.2 However, the cross-subsidy considering the similar tariff is more or less rationalised
as shown in the Table below, it is directed to the Petitioner to provide the proper road
map for reduction in cross subsidy in line with the provisions of the Electricity Act and
National Tariff Policy in the Tariff Petition to be submitted in the future.
Table 112: ABR/ACoS for FY 2032-24 as approved by the Commission
FY 2023-24
Average Average Cost
Cross
Category of Sales Revenue Billing Rate of Supply
Subsidy
Consumers (ABR) (ACoS)
(MU) (Rs. Crore) (Rs./kWh) (Rs./kWh) %
Kutir Jyoti 22.38 7.25 3.24 6.94 47%
Domestic 746.31 468.86 6.28 6.94 91%
Commercial 76.54 62.23 8.13 6.94 117%
Irrigation 62.79 39.51 6.29 6.94 91%
Water Works 136.41 103.12 7.56 6.94 109%
Industries 62.02 56.24 9.07 6.94 131%
Tea, Coffee & Rubber
7.98 6.57 8.23 6.94 119%
Plants
Bulk Supply 126.06 104.37 8.28 6.94 119%
Public Lighting 11.49 8.44 7.34 6.94 106%
Mobile Towers 89.21 73.86 8.28 6.94 119%
Total 1,341.19 930.45 6.94 6.94 100%

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7.4 Cross-Subsidy Surcharge

7.4.1 No submission has been made by TSECL with respect to Cross Subsidy Surcharge
(CSS).
Commission Analysis and Ruling
7.4.2 As per Section 2(47) of the said Electricity Act, 2003 defines “Open Access”, while
the Section 42 of the said Act inter-alia mandates the Distribution Licensee to provide
Open Access to eligible consumers, subject to payment of “Cross Subsidy
Surcharge” and other applicable open access charges. Also, as per Tripura
Electricity Regulatory Commission (Terms and Condition of Open Access)
Regulation, 2010, consumers with a connected load of 1 MW and above shall be
allowed open access against which the open access charges are required to be paid
by such consumers.
7.4.3 The Commission notes that TSECL has not proposed any CSS computation in the
Petition. Such lackluster approach may not be appreciable and it is directed to
TSECL to provide the complete tariff petition as per the provisions of the MYT
Regulations, as applicable.
7.4.4 The Commission observes that Hon'ble APTEL in its Judgment dated March 24,
2015 in Appeal No. 103 of 2012 had stipulated the methodology for determination of
tariff and cross-subsidy with reference to the VCoS. However, at present, the
voltage-wise losses are not available and the actual voltage-wise losses would be
available only after appropriate metering and measurement of separate losses
undertaken by TSECL. Further, the framework prescribed by the Hon'ble APTEL
requires that the category-wise tariffs be determined on the basis of ACoS as well as
VCoS, and also the tariffs for all categories should be within ±20% of the overall
ACoS for the Distribution Licensee.
7.4.5 The Commission feels that since the segregation of assets is still pending with the
various function and in the absence of a realistic assessment of the voltage-wise
losses, the determination of VCoS and thereafter CSS, may lead to incorrect
conclusions. Further, there is no denying that the cost of supply at higher voltages,
i.e., 220 kV, 132 kV, etc., will be lower than the cost of supply at lower voltages, i.e.,
LT, 11 kV, etc., on account of the lower distribution losses at higher voltages and
non-utilisation of the assets at lower voltages for supplying electricity to the
consumers at higher voltages.
7.4.6 As per the provisions of Section 42(2) of the Electricity Act 2003, the cross-subsidy
surcharge needs to be based on the current level of cross subsidy. Accordingly, the
consumers who opted for open access needs to be charged for the compensation of
current level of cross subsidy which prevailed during the period and in order to avoid
the burden of the same getting passed on other consumers who are with the
Distribution Licensee

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7.4.7 Therefore, in this order, the Commission has determined category-wise tariffs on the
basis of ACoS, while at the same time moving towards the philosophy that the tariffs
for the consumers taking supply at higher voltages is lower than that for consumers
taking supply at lower voltages. However, this objective cannot be achieved
immediately till the submission of reliable data. The Commission, in earlier chapter of
this Order, has already directed TSECL to segregate the voltage wise losses. In view
of this, the Commission does not accept the methodology proposed by TSECL.
7.4.8 Also, the Central Government notified the revised National Tariff Policy on
28thJanuary 2016 and has revised the “Surcharge Formula” as follows:
S = T - [C/ (1 - L/ 100) + D + R]
Where,
S is the Surcharge
T is the Tariff Payable by the relevant category of consumers including
reflection the Renewable Purchase Obligation
C is the per unit weighted average cost of power purchase by the Licensee,
including meeting the Renewable Purchase Obligation
D is the aggregate of transmission, distribution and wheeling charge
applicable to the relevant voltage level.
L is the aggregate of transmission, distribution and commercial losses,
expressed as a percentage applicable to the relevant voltage level
R is the per unit cost of carrying regulatory assets
Provided that the surcharge shall not exceed 20% of the tariff applicable to
the category of the consumers
seeking open access.
7.4.9 Based on the above formula, the Commission has worked out the various
components of CSS formulae based on the approved values of FY 202-23 and
computed category wise CSS in accordance with the Tariff Policy 2016.
Computation of Cross Subsidy Surcharge for FY 2023-24:
 Computation of Weighted Average cost of Power – “C”
Computation of C isper unit weighted average cost of power purchase which is

calculated based on the approved power purchase cost excluding PGCIL cost
and including the cost of own generation. The detail calculation is provided as
below:

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Table 113: Calculation of C for computation of CSS for FY 2023-24

FY 2023-24
Particulars
MUs Cost Rs./kWh
Own Generation 702.81 494.16 7.03
Power Purchase 3,034.45 1,218.59 4.02
Total 3,737.25 1,712.75 4.58
 Computation of system Loss - “L”
Computation of Lis the aggregate of transmission, distribution and commercial

losses. The Commission notes that at present, the voltage-wise losses are not
available and TSECL has made certain assumptions. The actual voltage-wise
losses would be available only after appropriate metering and measurement of
separate losses undertaken by TSECL. Further, the framework prescribed by
the Hon'ble APTEL requires that the category-wise tariffs be determined on the
basis of ACoS as well as VCoS, and also the tariffs for all categories should be
within ±20% of the overall ACoS for the Distribution Licensee.
The Commission feels that being the first petition filed by TSECL based on the
segregation of various function and in the absence of a realistic assessment of
the voltage-wise losses, the determination of VCoS and thereafter CSS, may
lead to incorrect conclusions. Accordingly, the overall system loss has been
considered for computation of loss for the category of consumers and the
Commission directs the Petitioner to provide the actual voltage wise loss for
determination of CSS in future tariff petition submission.
The Approved wheeling losses of the whole distribution system and the
transmission losses are used to arrive at the grossed up total system losses
for the Petitioner which is shown in the following table:
Table 114: Computation of System Loss for FY 2023-24
Particulars Loss (%)
Intra-State Transmission Loss 3.00%
Wheeling Loss 17.53%
Total System Loss 20.00%
 Computation of transmission, distribution and wheeling Charges – “D”
The Component D is the aggregate of the Transmission and Wheeling charges

as approved in the tariff order along (including PGCIL charges and intra-state)
and is outlined in the following table:
Table 115: Computation of Transmission and wheeling charges per unit for FY 2023-24
Particulars Unit FY 2023-24
Inter-State Transmission Charges Rs. Crores 116.64
Intra-State Transmission Charges Rs. Crores 33.86
Total Transmission Charges Rs. Crores 150.51

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Particulars Unit FY 2023-24

Sales Mus 1,341.19
Total Transmission Charges Rs./kWh 1.12
 Computation of Average Billing Rate ‘T’:
The effective Average Billing Rate as per tariff approved for FY 2023-24has been
considered.
 Determination of Cross Subsidy Surcharge ‘S’:
The category wise CSS applicable to open access consumers arrived on

consideration of the components ABR, C, L & D from the above referred respective
sections is provided in the tables below:
Table 116: Cross Subsidy Surcharge for FY 2023-24as approved by the Commission
CSS 20%
CSS -
T D=WL Comp of
C WL TL L Min
Consumer Category (ABR) + Tx uted - Tariff
(a,b)
a –b
Rs./unit % Rs./unit
Commercial
Semi-commercial: All units 8.22 4.58 17.53% 3.00% 20.00% 1.12 1.37 1.64 1.37
Three phase: All units 8.66 4.58 17.53% 3.00% 20.00% 1.12 1.81 1.73 1.73
Three phase Group 8.74 4.58 17.53% 3.00% 20.00% 1.12 1.89 1.75 1.75
IRRIGATION
Upto 5 H.P.: All units 5.48 4.58 17.53% 3.00% 20.00% 1.12 - 1.10 -
Above 5 H.P.: All units 6.71 4.58 17.53% 3.00% 20.00% 1.12 - 1.34 -
WATER WORKS: All units 7.56 4.58 17.53% 3.00% 20.00% 1.12 0.71 1.51 0.71
INDUSTRIAL
Upto 5 H.P.(E-R/5) 6.79 4.58 17.53% 3.00% 20.00% 1.12 - 1.36 -
Upto 5 H.P.(E-U/5) 7.32 4.58 17.53% 3.00% 20.00% 1.12 0.47 1.46 0.47
Above 5 - 20 H.P. 8.69 4.58 17.53% 3.00% 20.00% 1.12 1.84 1.74 1.74
Above 20 - 100 H.P. 9.27 4.58 17.53% 3.00% 20.00% 1.12 2.42 1.85 1.85
Above 100 H.P. 9.50 4.58 17.53% 3.00% 20.00% 1.12 2.65 1.90 1.90
Tea. Coffee & Rubber
8.23 4.58 17.53% 3.00% 20.00% 1.12 1.38 1.65 1.38
garden
BULK SUPPLY: All units 8.28 4.58 17.53% 3.00% 20.00% 1.12 1.43 1.66 1.43
PUBLIC LIGHTING
Panchayat: All units 6.35 4.58 17.53% 3.00% 20.00% 1.12 - 1.27 -
Nagar Panchayat / Municipal
7.85 4.58 17.53% 3.00% 20.00% 1.12 1.00 1.57 1.00
Area: All units
Special public utility 6.80 4.58 17.53% 3.00% 20.00% 1.12 - 1.36 -
Mobile Tower 8.28 4.58 17.53% 3.00% 20.00% 1.12 1.43 1.66 1.43
7.4.10 CSS determined above shall be applicable to consumer availing open access as per
TERC (Terms and Condition of Open Access) Regulation, 2010, as amended from
time to time.

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7.5 Tariff Principles

7.5.1 The Commission is guided by the provisions of the EA 2003, National Tariff Policy
and other Orders by APTEL in the matter of Tariff design, TERC Tariff Regulations,
2015. The Commission has considered the main objectives of the Electricity Act,
2003 including the protection of the interest of consumers, the supply of electricity to
all areas and rationalisation of tariffs. Apart from the above, the Commission also
taken into consideration TSECL’s submissions as well as the Public responses in
these proceedings.
7.5.2 Section 61 of the Act lays down the broad principles and guidelines for determination
of retail supply tariff. The guiding principles as laid down in Section 61 of the Act are
as follows:
a) The principles and methodologies specified by the Central Commission for

determination of the tariff applicable to generating companies and transmission
licensees;
b) The generation, transmission, distribution and supply of electricity are conducted
on commercial principles;
c) The factors which would encourage competition, efficiency economical use of the
resources, good performance and optimum investments;
d) Safeguarding of consumers„ interest and at the same time, recovery of the cost
of electricity in a reasonable manner;
e) The principles rewarding efficiency in performance;
f) Multi-year tariff principles;
g) That the tariff progressively, reflects the cost of supply of electricity, and also
reduces and eliminates cross-subsidies within the period to be specified by the
Appropriate Commission;
h) The promotion of co-generation and generation of electricity from renewable
sources of energy;
i) The National Electricity Policy and Tariff Policy.
7.5.3 Further, the Commission is well within its power to make required changes in the
tariff structure even if the Licensee has not proposed such changes or no indication
has been given to the public regarding the intended changes. In this context, the
Hon’ble Appellate Tribunal of Electricity (APTEL), vide its Order in Appeal No. 106 of
2008, has ruled that the Commission has the power to design the tariff as per its own
wisdom. It also mentions that the Commission does not need to seek public
comments before announcement of the tariff. The relevant part of the APTEL Order
in Appeal No. 106 of 2008 is reproduced below:
“…
14) It is not the case of the appellant that the Commission had no power to
create a tariff design different from the one proposed by the licensee. The

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Commission has the power to design the tariff as per its own wisdom. The
Commission need not, before issuing the actual order, publicly announce the
tariff it proposed and call for public comments. In fact this is not even the
appellant’s contention.
15) The rule of natural justice requires the Commission to issue a public notice
about the ARR and Tariff petition of the licensee and to allow the public to
make its submissions on the ARR and Tariff proposals. The Commission has,
thereafter, to design the scheme for recovery of the ARR keeping in view
various relevant factors. If the classification of the consumers can be
supported on any of the grounds mentioned in section 62(3) it would not be
proper to say that the tariff fixing was violative of principles of natural justice
because the Commission did not issue a public notice of the tariff categories
which the Commission had intended to create.”
7.5.4 Considering the above judgement, the Commission is proceeding with its analysis of
the existing tariff structure and considering changes as deemed appropriate by the
Commission.
7.5.5 The subsequent paragraphs deal with the submissions of TSECL regarding the Tariff
Philosophy and the changes approved by the Commission in the existing tariff
structure.
(a) Rebate for incremental consumption

TSECL’s Submission
7.5.6 TSECL has proposed a rebate of Rs. 1 per Unit (kWh) in energy charges to be
applicable for incremental monthly consumption applicable for consumers under
Industrial category (Above 20 HP). The incremental consumption for any month shall
be worked out based on the increase in monthly consumption compared to the
consumption of the same month last year.
7.5.7 For example, if a consumer had consumed 100 units in April’21 and consumes 120
units in April’22, then on the additional 20 units consumed, a rebate of Rs.1 i.e., Rs
20 on the monthly bill shall be provided.
7.5.8 This rebate shall also be applicable to the existing captive consumers who would like
to reduce their share of captive consumption and take more power from TSECL. The
same rebate of Rs. 1 per Unit (kWh) in energy charges shall be paid to the captive
consumers on every additional unit sourced from licensee (instead of captive
consumption).
7.5.9 The Commission is of the view that TSECL has only proposed the rebates without
giving any details of the impact on the revenue. The Commission directs TSECL to
propose such changes in tariff along with its impact on revenue in the next tariff

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Petition
(b) Rebate for Greenfield Industries

7.5.10 TSECL has proposed a rebate of Rs. 1 per unit to be applicable in energy charges
for new industrial connection for the total consumption recorded. The rebate shall be
allowed initially for a period of 5 years from the date of connection for such new
projects for which agreements for availing supply from licensee are finalized during
and after the date of issue of tariff order by the Commission. This is applicable for all
new industrial connections (> 50 kW or taking supply at 11 kV or above) or greenfield
connection who are setting up new Industries on a newly owned premises.
Petition.
(c) Load factor Rebate

7.5.12 TSECL has proposed Load factor rebate to the high load industries having contract
demand>500 kW. If such consumers achieve load factor of more than 75%, then a
rebate of 5% shall be provided on the total bill. If the load factor is more than 85%,
then a rebate of 10% shall be provided on the total bill.
Petition.
(d) Separate Tariff category for IT and ITeS consumers (Industries)

7.5.14 TSECL has submitted that the State Government is taking various steps to promote
IT industries within the state. In line with this, TSECL proposed a separate category
to all IT and ITES consumers who shall get an attractive single part tariff of INR 6 per
unit.

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7.5.15 The Commission at this stage is not inclined to change any terms and conditions of
Tariff and introduce separate tariff category for IT and ITeS consumers without
having details of its impact on other consumer categories.
(e) Power Factor Rebate and Penalty

7.5.16 TSECL has submitted that, at present, all the consumer categories are charged
based on the electricity consumption in kWh and as such there is no incentive for
improvement in power factor. Most of the other states in India have an incentive-
penalty provision in tariff for the big consumers like the industrial consumers to keep
the power factor within the acceptable limits and reduce the losses in the system.
7.5.17 Based on the similar provisions prevalent in other states, TSECL proposed to
introduce the following power factor rebate and penalty provision for Industrial
Category consumers (above 20 HP) initially. The same shall be presently applicable
only for all industrial category consumers but may be extended for other categories in
future:
(a) Power Factor Rebate:

i. In case, the average PF (leading or lagging) maintained by the consumer
is more than 0.85 and upto 0.95, a rebate of 1% on the Energy Charges
on unit consumption shall be applicable;
ii. For PF (leading or lagging) of 0.95 and above upto 0.97, a rebate of 2%
on the Energy Charges on unit consumption shall be applicable;
iii. For PF (leading or lagging) of 0.97 and above upto Unity PF, a rebate of
3%on the Energy Charges on unit consumption shall be applicable.
(b) Power Factor Penalty:
i. In case average PF (leading or lagging) in a month for a consumer
fallsbelow 0.85, a penalty @1% for every 1% fall in PF (leading or
lagging) from0.85 to 0.60; plus 2% for every 1% fall below 0.60 to 0.30
upto and including0.30 shall be levied on total unit consumption.
7.5.18 The Commission in the last tariff order had TSECL to start awareness program
among the HT Consumers informing them about the impact of having low PF and
also inform the Commission of the availability of metering infrastructure to introduce
the said mechanism of PF Incentive/Penalty. The Commission was of the view that it
is advisable that consumers get sufficient lead time to take corrective action to
improve the PF to avoid penalty of maintaining low PF when it is approved by the
Commission in the next tariff Order. TSECL was also directed to do sample study of
HT Consumers of different category and submit the impact of the same on tariff of
the consumers in the next tariff Petition.

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7.5.19 However, TSECL has not submitted any such details as directed by the Commission.
Accordingly, the Commission is not inclined to introduce the PF Incentive/Penalty in
the present Order. It will be considered once all the details are submitted by TSECL
as mentioned herein above in the next tariff Petition
(f) Revision in Fixed Charges

7.5.20 TSECL has submitted that it has been observed that the fixed charges in Tripura is
much less than the fixed charges applicable for most of the states. As such, it is
requested that beyond, the uniform tariff increase approved by the Commission in
this order, the Commission is requested for approving additional increase in fixed
charges to bring it at the level of other states in India. A comparative statement of
fixed charges of industrial consumers is provided below. It can be observed that the
fixed charges can be increased by at least by 100% to bring to the level of other
States.
7.5.21 The Commission notes that Fixed Charges in the State are comparatively lower than
the Other States. The revenue from Fixed Charges contributes to only 7.77% of total
revenue in FY 2023-24 at existing tariff. The Commission opines that the contribution
of Fixed Charges is much lower considering the fixed cost payable by TSECL.
Hence, it would be appropriate to increase the Fixed Charges in the current Order.
The Commission has not inclined to increase the Fixed Charges by 100% as
proposed by TSECL. However, the gradual revision in Fixed Charges is required to
be made over period of 5 years. Hence, in the present Order, the Commission has
revised Fixed Charges across consumer categories.
(g) Tariff for Bulk Supply

7.5.22 TSECL submitted that, at present, the Bulk Supply category has options for supply at

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LT level with provision of adding transformation loss of 3%. It is submitted that the
bulk category option in all states is provided for consumers with high load/demand
and in such cases, the supply is provided only at HT level. As such, allowing the bulk
consumers to get the supply at LT level results is increase of line losses for high
value consumers, increasing the operation and maintenance cost for TSECL and
uniformity in providing connections to different consumers. Hence, it is requested that
the current provision of allowing bulk consumers to receive supply at LT level be
discontinued and all bulk consumers should get supply at HT level.
7.5.23 The Commission at this stage is not inclined to change any terms and conditions of
Tariff.
7.6 Approved Tariff for FY 2023-24

The category-wise tariffs approved by the Commission for FY 2023-24 are as follows:
A. Kutir Jyoti
Applicability
Kutir-Jyoti connection is covered under scheme of the State Government or Central

Government. Maximum connected load of 120 Watt (60 watt x 2 points) and
maximum monthly consumption of 15 kWh is allowed for this category. If
consumption of a Kutuir Jyoti Consumer in a month increases beyond 15 kWh, then
such consumer will be charged as per tariff rates applicable to normal Domestic
Category for that month.
Tariff:
Particulars Fixed Charge
For consumption upto 15 kWh/month Rs. 68 / connection / month
a. If, during any billing period, the consumption exceeds the stipulated 30
kWh/month, the consumers will be considered as if they are shifted to the next
appropriate Domestic category on telescopic tariff structure.
b. Rebate: A special rebate of 5% on the total billing amount will be allowed to the
consumer for prompt payment made within 7 days from billing date.
c. Surcharge for delayed payment: Surcharge @ 2% per month or part thereof at
simple interest shall be levied, if payment is made after the due date.
d. Fuel and Power Purchase Cost Adjustment (FPPCA) charges as applicable will
be charged extra to be computed on a quarterly basis.
e. The Tariff does not include any tax or duty levied by the Government, which will
be charged at actual as and when applicable.

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B. Domestic
Applicability
Electric service connection related to consumption of electricity for lights, all types of
fans, heating devices, television, radio, refrigerator, air conditioner and all other
appliances for consumers' own domestic use but not for commercial purpose,
educational institutions owned or aided by State/Central Government and all
Government hospitals and all hospitals owned by charitable institutions (not
maintained for commercial purposes), as approved and notified by the State
Government.
Tariff:
Sub-Category/Slab Energy Charge Fixed Charge
– Rs/kWh
Domestic (rural): 0-50 units 4.23 Rs. 20/Connection/Month

Slab 1: Up to 50 Units 5.08 Rs. 30/Connection/Month
Slab 2: 51 – 150 units 6.40 Rs. 45/Connection/Month
Slab 3: 151 – 300 units 6.59 Rs. 55/Connection/Month
Slab 4: 301 units onwards 7.70 Rs. 55/Connection/Month
Three phase (Compulsory above 4
7.70 Rs. 55/kW/Month
kW): All units
Consumers in Domestic (Rural) and Slab 1 to Slab 4 will be billed as per telescopic
tariff structure, as explained below.
If an urban domestic consumer consumes 330 units in a month, his/her applicable
Fixed Charge would be Rs. 55 for the month and applicable energy charge will be as
shown in the following Table:
Slabs Units Consumed Energy Charge – Total Amount Rs.

Rs/kWh
Upto 50 Units 50 5.08 254.00
Next 100 Units 100 6.40 640.00
Next 150 Units 150 6.59 988.50
301 Unit onwards 30 7.70 231.00
Total 330 2,113.50
a. Rebate: A special rebate of 5% on the total billing amount will be allowed to the

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b. Surcharge for delayed payment: Surcharge @ 2% per month or part thereof at

c. Fuel and Power Purchase Cost Adjustment (FPPCA) charges as applicable will
be charged extrato be computed on a quarterly basis.
d. The Tariff does not include any tax or duty levied by the Government, which will
Note:
If a portion of the household is used for the conduct of any purpose other than those
specified above, the entire consumption shall be billed under the
Commercial/Industrial category as applicable.
C. Commercial
Applicability
Electric service connection related to consumption of electricity for lights, all types of
fans, heating devices, television, radio, refrigerator, air conditioner, lift motors, pumps
and all other appliances used for commercial purposes maintained for private gain
including other small power, supply of power to Cinema Hall, Auditorium, Stadium,
Nursing Home, Pathological & Clinical Laboratories, Chamber of Medical
Practitioners, Advocates/Consultant Engineers/Chartered Accountants and similar
others, Private Educational Institutions, Hospitals, etc.
Tariff:
Energy Charge –
Sub-Category/Slab Fixed Charge
Rs/kWh
Small Commercial / Pan
6.23 Rs. 30/Connection/Month
shop: 0-50 unit*
Slab 1: Up to 150 units 7.02 Rs. 50/Connection/Month
Slab 2: 151 units onwards 7.61 Rs. 65/Connection/Month
Semi Commercial: All units 7.76 Rs. 55/kW/Month
Three Phase (Compulsory

above 4 kW): All units
Three Phase – Group
Consumer: All units
* if consumption exceeds beyond 50 unit in any month, the consumer will be treated
as consumer of next slab for that month.
Consumers in Slab 1 and Slab 2 will be charged as per telescopic tariff structure as
explained below.

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If, a commercial consumer consumes 330 unit in a month, his/her applicable fixed
charge shall be Rs. 65 for the month and energy charge shall be as shown in the
following Table:
Slabs Units Energy Charge – Total Amount Rs.

Consumed Rs/kWh
Upto 150 Units 150 7.02 1,053.00

151 Units Onwards 180 7.61 1,369.80
Total 330 2,422.80
D. Mobile Towers
Applicability
Electric service connection related to consumption of electricity in Mobile Tower and
metered on HT supply end or on L.T. supply plus 3% transformer loss.
Tariff:
Category Energy Charge – Fixed Charge

Rs/kWh
Mobile Tower – All Units 7.85 Rs. 130/kW/Month

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E. Irrigation
Applicability
Applicable for motive power for irrigation including the power consumed for light and
fans in pump house for irrigation.
Tariff:
Energy Charge –
Sub-Category Fixed Charge
Rs/kWh
Up to 5 H.P: All units 5.30 Rs.35/KW/Month
Above 5 H.P.: All units 6.37 Rs.65/KW/Month
F. Water Works
Applicability
Applicable for motive power for Water Works including the power consumed for light
and fans in pump house for Water Works for all units consumed.
Tariff:
Category Energy Charge – Fixed Charge

Rs/kWh
Water Works – All Units 7.12 Rs. 45/kW/Month

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G. Industrial
Applicability
Electric service connection related to supply/consumption of electricity for industrial
purpose, each installation having motor and other industrial appliances, Battery
Charger, Welding Transformer, etc., including the power consumed for light & fan in
an industry
Tariff:
Sub-Category Energy Charge – Fixed Charge
Rs/kWh
Up to 5 HP (E-R/5): All units 6.35 Rs.30/KW/Month
Up to 5 HP (E-U/5): All units 6.81 Rs.35/KW/Month
Above 5 to 20 HP: All units 7.60 Rs.50/KW/Month
Above 20 to 100 HP: All units 7.75 Rs.65/KW/Month
Above 100 HP: All units 7.76 Rs.80/KW/Month
H. Tea, Coffee and Rubber Garden
Applicability
Electric service connection related to consumption of electricity for Tea, Coffee and
Rubber Plantation/Garden for utilisation of electric power for factory and irrigation in
the estate including the power consumed for lights and fans, in and around the
factory premises for all units.
Tariff:
Rs/kWh
Tea, Coffee and Rubber 8.03 Rs.105/KW/Month
Gardens: All units

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I. Bulk Supply
Applicability
Electric service connection related to consumption of electricity to the organizations
and establishments having total connected load of 25 kVA or above, such
Institutions, School, College, University, Defence installations, Railways, All India
Radio, Office complex Departmental, Colony, Dairy with Chilling Plant, Doordarshan,
Cold storage, who are maintaining LT distribution system and having mixed load but
desirous to be bulk power supply consumers based on bulk power supply contract
agreement and metered on HT supply end or on L.T. supply plus 3% transformer
loss.
Tariff:
Rs/kWh
Bulk Supply: All units 7.84 Rs.80/KW/Month
J. Public Lighting
Applicability
Electric service connection related to consumption of electricity for Public Lighting for
Panchayat and Nagar Panchayat /Municipal area.
Tariff:
Rs/kWh
Public Lighting 5.94 Rs.35/KW/Month
(Panchayat)
Public Utility (Nagar 7.09 Rs.65/KW/Month
Panchayat / Municipality)

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K. Special Public Utility
Applicability
Special public utility for crematorium, emergency water pumping, drainage,
dewatering, etc., for all units consumed.
Tariff:
Energy Charge – Fixed Charge
Sub-Category
Rs/kWh
Special Public Utility 6.21 Rs.50/KW/Month
(Crematorium)
Special Public Utility 6.21 Rs.50/KW/Month
(Emergency Water
Pumping, Drainage,
Dewatering, etc.)
L. Electric Vehicle Charging Station
Applicability
Electric Vehicle Charging Station (Not for Own Use) for all units consumed.
Tariff:
Energy Charge – Fixed Charge
Sub-Category
Rs/kWh
All Units 6.90 Rs.50/KW/Month

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TOD Tariff
Applicability
All consumers under Industrial, Tea/Coffee/Rubber Gardens, Bulk Supply, Water
Works, and Irrigation categories would have the option of taking TOD tariff, wherein
the following rates would be applicable.
Tariff:
From To Energy Charge –
Period
Rs/kWh
5:00 AM 5:00 PM Normal Normal Rate
5:00 PM 11:00 PM Peak 140% of the Normal
Rate
11:00 PM 5:00 AM Off-Peak 60% of the Normal
Rate
N.B: Any error or required corrections noticed may be pointed out to the Commission
within 15 days of issuance of the Tariff Order.
7.7 Approved Miscellaneous and Other Charges for FY 2023-24

The Commission approves the existing Miscellaneous and Other Charges applicable
for FY 2023-24, as shown in the table below:
Table 117: Miscellaneous and Other Charges as approved by the Commission
Sl. Approved for FY

Charge
No. 2023-24
Category-I:- MISCELLANEOUS CHARGES
The tariff for temporary supply for lights and fans for festival,
A ceremonies, public meeting shall be charged at the following rate,
namely :-
I Net Rs. 6.00 / kWh
Ii Rebate Rs. 0.10 / kWh
Iii Gross Rs. 5.90 / kWh
N.B: The minimum charge for each installation which shall be paid in advance shall Rs. 60/- per day per
be kW of contracted load

_________________________________________________________________________
Sl. Approved for FY

Charge
No. 2023-24
or a fraction thereof
The tariff for temporary supply for lights & fans to commercial
establishment which shall include temporary Cinema, Theater,
B
Circus, Exhibition, Fare shall be charged at the following rate,
namely:-
I Net Rs. 7.00 / kWh
Ii Rebate Rs. 0.10 / kWh
Iii Gross Rs. 6.90 / kWh
Rs.60/- per day per
N.B: The minimum charge for each installation which shall be paid in advance shall
KW of contracted load
be
or a fraction thereof
Category: Other Charges
The monthly meter rent for different phases shall be at the
1
following rate, namely:-
I For single phase meter not exceeding 10 Amp - Rs. 10.00
Ii For three phase meter - Rs. 20.00
Iii For three phase meter with C.T. Rs. 40.00
For HT metering equipment i.e. kWh meter with MDl & KVR
Iv Rs. 250.00
supplied by the Deptt. -
V For Trivector meter- Rs. 400.00
Vi For TOD meter Rs. 400.00
The charges for testing of meter at the request of consumer for different
2
phase shall be at the following rate, namely:-
I For each single phase meter- Rs. 50.00
Ii For each three phase meter - Rs. 100.00
Iii For each HT meter - Rs. 250.00
Provided that after testing it is found that the meter has no defect, and
it is in order.
The charges for replacement of meter owing to temporary increase
3 of load which shall be paid in advance shall be at the following rates,
namely:-
I For single phase Rs. 100.00
Ii For three phase Rs. 250.00
4 The charge for replacement of fuse at consumer premises. Nil
The charges for installation of subtraction meter & additional meter
at consumer's meter board shall be NOTE- Where two or more
5 meters are installed against one connection instead of one meter to Rs. 250.00
suit the convenience of the consumer, reading of the main meter will
be taken and billed for.
The monthly meter rent for an additional meter shall be at the
6
following rates, namely:-

_________________________________________________________________________
Sl. Approved for FY

Charge
No. 2023-24
There shall be no charge for test, inspection and connection of a new
installation. But for any further test or inspection which may be found
7 Rs. 200.00
necessary owing to any fault in the installation or due to non- compliance
with the condition of supply the charge for each additional test shall be
The charges for disconnection on consumers request shall be at the
8
following rate, namely:-,
Iii For Bulk/HV/EHV Rs. 200.00
The charges for reconnection on consumers request shall be at the
9
following rates, namely:-
Iii For Bulk/HV/EHV Rs. 250.00
The charges for temporary connection which shall be non-refundable
10 for all categories of load through a meter within permissible distance
from the electric supply main shall be at the following rates, namely:-
Rs. 300.00 per
I For 220-230V(i.e. Single Phase connection)
installation
Rs. 500.00 per
Ii For 380-400V (i.e. 3-phase, 4-wire connection).
installation
N.B: (i) The consumer shall supply all materials required for service
lines as may be approved by licensee, from the nearest pole of the
supply point. There shall be no disconnection charge and meter rent
for temporary connection.
N.B: (ii) For temporary. Connection the consumer shall pay as security
deposit of Rs.750.00 for single phase or Rs.1500.00 for three phase
supply which is refundable after disconnection of the temporary
connection and final payment of the energy bill by consumer.
N.B: (iii) For the purpose of this clause, temporary connection means a
connection for a continuous period not exceeding 15 days.
The charge for changing of meter by a larger capacity at the request of
11 consumer in respect of permanent connection shall be at the following
rates, namely:-
I For 220-230V(Single phase) Rs. 150.00
Ii For 380-400V (3-phase, 4-wire). Rs. 400.00
The charge for changing the position the meter & the board within the
same building at the request of the consumer when no addition in the
service line is required shall be at tile following rates, namely:-
I For 220-230V(Single phase) Rs. 200.00
Ii For 380-400V (3-phase, 4-wire). Rs. 400.00
13. Charges for calibration of check meter upon request of consumer. Rs. 200.00
14. Charges for special meter reading on consumer request Rs. 150.00
The Government of Tripura will be providing subsidy of Rs. 50 Crore to different

_________________________________________________________________________
8 Annexure 1: Approved Tariff Schedule for FY 2023-24
Sl. Consumer Energy Charge

Fixed Charge
No Category/Slabs (Rs./kWh)
A. Kutir Jyoti Rs.68/Connection/Month
B. Domestic
Domestic (rural): 0-50
Rs.20/Connection/Month 4.23
units
Slab 1: Up to 50 Units Rs.30/Connection/Month 5.08
Slab 2: 51 – 150 units Rs.45/Connection/Month 6.40
Slab 3: 151 – 300 units Rs.55/Connection/Month 6.59

Slab 4: 301 units
onwards
Three phase
(Compulsory above 4 Rs.55/kW/Month 7.70
kW): All units
C. Commercial
shop: 0-50 unit Rs.30/Connection/Month 6.23
Slab 1: Up to 150 units Rs.50/Connection/Month 7.02

Slab 2: 151 units
onwards
Semi Commercial: All
Rs.55/kW/Month 7.76
units
Three Phase
(Compulsory above 4 Rs.55/kW/Month 7.97
kW): All units
Rs.55/kW/Month 8.06
Consumer: All units
D. Mobile Tower: All units Rs.130/kW/Month 7.85
E. Irrigation
Up to 5 H.P: All units Rs.35/kW/Month 5.30
Above 5 H.P: All units Rs.65/kW/Month 6.37
F. Water works: All units Rs.45/kW/Month 7.12
G. Industrial
Up to 5 HP (E-R/5): All
Rs.30/kW/Month 6.35
units
Up to 5 HP (E-U/5): All
Rs.35/kW/Month 6.81
units
Above 5 to 20 HP: All
Rs.50/kW/Month 7.60
units
Above 20 to 100 HP: All Rs.65/kW/Month 7.75

_________________________________________________________________________
Sl. Consumer Energy Charge

Fixed Charge
No Category/Slabs (Rs./kWh)
units
Above 100 HP: All units Rs.80/kW/Month 7.76

Tea, Coffee and Rubber
H. Rs.105/kW/Month 8.03
Gardens: All units
I. Bulk Supply: All units Rs.80/kW/Month 7.84
J. Public Lighting
Public Lighting
Rs.35/kW/Month 5.94
(Panchayat)
Public Utility (Nagar
Panchayat / Rs.65/kW/Month 7.09
Municipality)
Special Public Utility
Rs.50/kW/Month 6.21
(Crematorium)
(Emergency Water
Rs.50/kW/Month 6.21
Pumping, Drainage,
Dewatering, etc.)
Electric Vehicle
L. Rs.50/kW/Month 6.90
Charging Station

_________________________________________________________________________
9 Annexure 2: Tariff Schedule for FY 2023-24 after considering

Government Subsidy
Energy Charge after

Approved Tariff for FY 2023-24
considering Govt. Subsidy
Sl. Consumer Energy Rate
Energy Govt
No Category/Slabs after Govt.
Fixed Charge Charge Subsidy
Subsidy
(Rs./kWh) (Rs/kWh)
(Rs/kWh)
Rs.4/Connect Rs.64/Connec
A. Kutir Jyoti Rs.68/Connection/Month
ion/Month tion/Month
B. Domestic
Domestic (rural): 0-50
Rs.20/Connection/Month 4.23 0.69 3.54
units
Slab 1: Up to 50 Units Rs.30/Connection/Month 5.08 0.67 4.41
Slab 2: 51 – 150 units Rs.45/Connection/Month 6.40 0.52 5.88
Slab 3: 151 – 300 units Rs.55/Connection/Month 6.59 - 6.59

Slab 4: 301 units
Rs.55/Connection/Month 7.70 - 7.70
onwards
Three phase
(Compulsory above 4 Rs.55/kW/Month 7.70 0.15 7.55
kW): All units
C. Commercial
shop: 0-50 unit Rs.30/Connection/Month 6.23 0.62 5.61
Slab 1: Up to 150 units Rs.50/Connection/Month 7.02 0.51 6.51

Slab 2: 151 units
Rs.65/Connection/Month 7.61 - 7.61
onwards
Semi Commercial: All
Rs.55/kW/Month 7.76 0.10 7.66
units
Three Phase (Compulsory
Rs.55/kW/Month 7.97 0.10 7.87
above 4 kW): All units
Rs.55/kW/Month 8.06 0.15 7.91
Consumer: All units
D. Mobile Tower: All units Rs.130/kW/Month 7.85 - 7.85
E. Irrigation
Up to 5 H.P: All units Rs.35/kW/Month 5.30 1.40 3.90
Above 5 H.P: All units Rs.65/kW/Month 6.37 1.40 4.97
F. Water works: All units Rs.45/kW/Month 7.12 1.40 5.72
G. Industrial
Up to 5 HP (E-R/5): All
Rs.30/kW/Month 6.35 0.10 6.25
units
Up to 5 HP (E-U/5): All
Rs.35/kW/Month 6.81 0.10 6.71
units
Above 5 to 20 HP: All Rs.50/kW/Month 7.60 - 7.60

_________________________________________________________________________
Energy Charge after

Approved Tariff for FY 2023-24
considering Govt. Subsidy
Sl. Consumer Energy Rate
Energy Govt
No Category/Slabs after Govt.
Fixed Charge Charge Subsidy
Subsidy
(Rs./kWh) (Rs/kWh)
(Rs/kWh)
units
Above 20 to 100 HP: All

Rs.65/kW/Month 7.75 - 7.75
units
Above 100
Rs.80/kW/Month 7.76 - 7.76
HP: All units
Tea, Coffee and Rubber
H. Rs.105/kW/Month 8.03 0.30 7.73
Gardens: All units
I. Bulk Supply: All units Rs.80/kW/Month 7.84 - 7.84
J. Public Lighting
Public Lighting
Rs.35/kW/Month 5.94 0.57 5.37
(Panchayat)
Public Utility (Nagar
Rs.65/kW/Month 7.09 0.57 6.52
Panchayat / Municipality)
Rs.50/kW/Month 6.21 1.10 5.11
(Crematorium)
(Emergency Water
Rs.50/kW/Month 6.21 1.10 5.11
Pumping, Drainage,
Dewatering, etc.)
Electric Vehicle Charging
L. Rs.50/kW/Month 6.90 - 6.90
Station

_________________________________________________________________________
10 Appendix 1: Number of Consumers from FY 2020-21 to FY 2023-24(P)
Sl. No. Consumer Category FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24

1. Domestic 747,973 851,690 912,556 977,771
2. Commercial 67,018 71,645 76,052 80,731
3. Irrigation 6,531 7,871 8,465 9,103
4. Public water works 6,535 9,444 10,869 12,509
5. Industries 5,226 6,467 6,947 7,462
6. Tea, Coffee & Rubber Garden 48 56 62 69
7. Bulk supply 1,140 1,378 1,553 1,750
8. Public Lighting 2,405 2,423 2,544 2,671
9. Mobile Towers 1,581 2,071 2,389 2,755
10. Grand Total 838,457 953,045 1,021,436 1,094,820

_________________________________________________________________________
11 Appendix 2: Connected Load from FY 2020-21 to FY 2023-24(P)

1. Domestic 205.33 223.58 248.82 276.90
2. Commercial 54.22 49.70 54.06 58.81
3. Irrigation 26.64 25.08 26.16 27.28
5. Industries 109.32 101.97 106.29 110.79
6. Tea, Coffee & Rubber Garden 0.92 1.06 1.17 1.29
7. Bulk supply 40.58 44.86 50.84 57.62
8. Public Lighting 12.06 10.57 10.91 11.26
9. Mobile Towers 15.18 20.39 22.39 24.60
10. Grand Total 522.41 557.63 615.14 679.60

_________________________________________________________________________
12 Appendix 3: Sales (MU) from FY 2020-21 to FY 2023-24(P)

1. Domestic 588.22 640.38 701.61 768.69
2. Commercial 72.00 68.12 72.21 76.54
3. Irrigation 38.00 47.75 54.75 62.79
5. Industries 43.44 52.09 56.84 62.02
6. Tea, Coffee & Rubber Garden 2.80 4.03 5.67 7.98
7. Bulk supply 87.54 115.86 120.86 126.06
8. Public Lighting 46.07 11.49 11.49 11.49
9. Mobile Towers 28.32 59.95 73.13 89.21
10. Grand Total 982.33 1,099.22 1,213.09 1,341.19

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TRIPURA ELECTRICITY REGULATORY COMMISSION

TARIFF ORDER FOR FY 2023-24

Petition No. 3 (Truing up) of 2023 and 4 (MYT) of 2023

True-up of FY 2020-21 and FY 2021-22, Annual Performance Review of FY

1 BACKGROUND AND SALIENT FEATURES OF THE ORDER ........................................... 16

1.1 BACKGROUND ........................................................................................................... 16

2 SUGGESTIONS/OBJECTIONS, TSECL’S RESPONSES AND COMMISSION’S RULING ..... 23

2.1 OBJECTION: DISCOUNT TO COMMERCIAL TARIFF TO BE GIVEN FOR HOSPITALS ....................... 23

3 TRUING UP OF ARR FOR FY 2020-21 AND FY 2021-22, APR OF FY 2022-23AND ARR OF

3.1 BACKGROUND AND APPROACH ..................................................................................... 34

Tariff Order for TSECL for FY2023-24 Page 2 of 151

FY 2023-24 FOR TRANSMISSION BUSINESS ........................................................................ 71

4.1 BACKGROUND AND APPROACH ..................................................................................... 71

5.1 BACKGROUND AND APPROACH ..................................................................................... 85

6 DIRECTIVES OF THE COMMISSION............................................................................. 119

7 TARIFF PRINCIPLES AND DESIGN .............................................................................. 120

7.1 TARIFF PROPOSAL FOR FY 2023-24 ........................................................................... 120

8 ANNEXURE 1: APPROVED TARIFF SCHEDULE FOR FY 2023-24 .................................. 145

Tariff Order for TSECL for FY2023-24 Page 3 of 151

9 ANNEXURE 2: TARIFF SCHEDULE FOR FY 2023-24 AFTER CONSIDERING GOVERNMENT

10 APPENDIX 1: NUMBER OF CONSUMERS FROM FY 2020-21 TO FY 2023-24(P) ............. 149

11 APPENDIX 2: CONNECTED LOAD FROM FY 2020-21 TO FY 2023-24(P) ........................ 150

12 APPENDIX 3: SALES (MU) FROM FY 2020-21 TO FY 2023-24(P) ................................... 151

Tariff Order for TSECL for FY2023-24 Page 4 of 151

Tariff Order for TSECL for FY2023-24 Page 5 of 151

(Rs. Crore) ........................................................................................................................ 56

Tariff Order for TSECL for FY2023-24 Page 6 of 151

Tariff Order for TSECL for FY2023-24 Page 7 of 151

Tariff Order for TSECL for FY2023-24 Page 8 of 151

Tariff Order for TSECL for FY2023-24 Page 9 of 151

Tariff Order for TSECL for FY2023-24 Page 10 of 151

TRIPURA ELECTRICITY REGULATORY COMMISSION

Honourable Shri. Jiban Krishna Sen, Member

Dated: 22September, 2023

In the matter of ……………….

Tripura State Electricity Corporation Limited (TSECL) ….. Petitioner

Bidyut Bhawan, North Banamalipur

Tariff Order for TSECL for FY2023-24 Page 11 of 151

Petition No:4 (MYT) of 2023

In the matter of ……………….

Tripura State Electricity Corporation Limited (TSECL) ….. Petitioner

Bidyut Bhawan, North Banamalipur

Tariff Order for TSECL for FY2023-24 Page 12 of 151

A&G Administrative and General

Tariff Order for TSECL for FY2023-24 Page 14 of 151

MoP Ministry of Power

Tariff Order for TSECL for FY2023-24 Page 15 of 151

1 Background and Salient Features of the Order

Tariff Order for TSECL for FY2023-24 Page 16 of 151

1.2 Tariff Orders issued by the Commission earlier:

Tariff Order for TSECL for FY2023-24 Page 17 of 151

1.3 Admission of Current Petition filed by TSECL

Tariff Order for TSECL for FY2023-24 Page 18 of 151

1.3.3 Petition No. 3 (Truing-up) of 2023

Petition No.4 (MYT) of 2023

a. Admit this Petition;

Tariff Order for TSECL for FY2023-24 Page 19 of 151

submissions as may be required at a future date.

1.3.4 On preliminary scrutiny of the Petition, the Commission observed several

1.4 Public Consultation Process