- (1.) Maharashtra State Electricity Distribution Company Limited (herein after referred to as MSEDCL) filed a Petition on 29 November 2013, seeking determination of cross subsidy surcharge in accordance with the Section 42(2) and Section 86(1)(a) of the Electricity Act, 2003 and Regulation 13 of MERC (Distribution Open Access) Regulations, 2005. 1. The prayers in the Petition are as under: " 1) To admit the Petition for determination of cross subsidy surcharge accordance with the Section 42(2) and 86(1) of Electricity Act 2003 and Regulation 13 of MERC (Distribution Open Access ) Regulations, 2005; 2) To approve the cross subsidy surcharge as worked out by MSEDCL which will be applicable for existing as well as new Open Access consumers with effect from 01 st September 2013; 3) To pass any other order as the Hon'ble Commission may deem fit and appropriate under the circumstances of the case and in the interest of justice. 4) To condone any error / omission and to give opportunity to rectify the same. 5) To permit MSEDCL to make further submissions, addition and alteration to this petition as may be necessary from time to time". Facts of the Petition submitted by MSEDCL in its Petition:
(2.) The submissions made by the Petitioner have been summarized below: - 2.1. The Commission had previously vide Order dated 9 September, 2011 in the matter of Petition filed by MSEDCL regarding cross subsidy surcharge, standby charges for Open Access consumers, de novo re -determination of cross subsidy surcharge and issues related to Open Access (Case No. 43 of 2010) had determined the cross subsidy surcharge payable by all the consumers of the Distribution Licensees in Maharashtra, who may opt for Open Access, under MERC (Distribution Open Access) Regulations, 2005. 2.2. The Commission in its previous Order had determined consumer category wise cross subsidy surcharge for the consumers of the Petitioner opting for Open Access. The cross subsidy surcharge "S" inter alia depends upon "T", i.e., the tariff payable by relevant category of consumers, "C", i.e., the weighted average cost of power purchase of top 5 % of the margin excluding liquid fuel based generation and renewable power, "D", i.e., the wheeling charges and "L", i.e., the system losses for the applicable voltage level. 2.3. The Commission vide its Order dated 16 August, 2012 in Case No. 19 of 2012 approved the final true up for FY 2010 -11 and determined the Aggregate Revenue Requirement of FY 2011 -12 and FY 2012 -13 and Tariff for FY 2012 -13. 2.4. Further, the Commission vide Order dated 21 February, 2013 in Case No. 138 of 2012 re - determined the cross subsidy surcharge for MSEDCL in accordance with the Tariff Order dated 16 August, 2012 in Case No. 19 of 2012. 2.5. The Petitioner further submitted that the Commission vide its Order dated 5 September, 2013 in Case No. 95 of 2013 had Suo motu determined the supplementary charges to be recovered by MSEDCL to give effect to other Orders. The commission had allowed MSEDCL to recover the accumulated under -recovery of Rs. 2037.78 Crore accrued till the month of August 2013, which shall be levied by MSEDCL for a period of six (6) months with effect from the month of September 2013 till the month of February 2014. Additionally, MSEDCL was permitted to recover monthly fixed expense of Rs. 235.39 Crore from September 2013 onwards. 2.6. The Petitioner further submitted that in the Petition for Case No. 107 of 2013, it had inadvertently mentioned that it sought the re -determination of Cross Subsidy Surcharge only due to increase in the ABR (Average Billing Rate) of the MSEDCL consumers vide the Commission's Order dated 5 September 2013 in Case No. 95 of 2013. However, while calculating the proposed cross subsidy surcharge the Petitioner had considered the impact of three Orders issued by the Commission, as shown in below table. However, the Petitioner inadvertently omitted the details of Orders in Case No. 28 of 2013 and Case No. 44 of 2013 in the Petition. Table 1: Summary of AEC -1, AEC -2, AEC -3, AEC -4 and Addl. FAC submitted by MSEDCL MSEDCL Submission Case No. Particulars Impact Category (Rs. crore) Impact of true up of MSPGCL for FY 2010 -11, provisional fixed cost for Khaperkheda Unit -5 (up to March Case No. 95 2013), Bhusawal Unit -4 (up to 2037.78 AEC -1 of 2013 August 2013) and incremental transmission tariff (up to August 2013) Rs. 235.39 crore per month towards Case No. 95 fixed cost of Bhusawal Unit -4 and 1,647.73 AEC -2 of 2013 transmission tariff (for the period September 2013 ­ March 2014) AEC -3 : 273 crore Case No. 28 Impact of ATE Judgments 735.34 Addl. FAC: 462 of 2013 crore AEC -4 : 642 crore Case No. 44 Capital cost and tariff approval for 920 Addl. FAC : 278 of 2013 Khaperkheda Unit -5 crore 2.7. The Petitioner submitted that out of the total approved amount of Rs. 735.34 crore in Case No. 28 of 2013; fixed charges of Rs. 273 crore are being recovered through AEC -3 and fuel related charges of Rs. 462 crore form a part of Additional FAC. 2.8. With regards to the Commission's Order in Case No. 44 of 2013 on determination of capital cost and tariff of Khaperkheda Unit -5, the Petitioner provided the following summary of the impact of the Order: Table 2: Impact of Order in Case No. 44 of 2013 as submitted by MSEDCL MSEDCL Submission Particulars Rs. Crores AEC / Addl. FAC Under -recovered fuel cost for infirm power (to be 28 Addl. FAC recovered in 3 months through FAC) Difference in revenue due to Provisional and Revised 178 Addl. FAC Charges for FY 2012 -13 Difference in revenue due to Provisional and Revised 72 Addl. FAC Charges for FY 2013 -14 (till August 2013) Fixed Charges for Khaparkheda Unit -5 for FY 12 -13 46 AEC -4 Fixed Charges for Khaparkheda Unit -5 for 5 months for 248 AEC -4 FY 13 -14 Monthly Fixed Charges of Khaparkheda Unit -5 348 AEC -4 (596.13/12*7) Total 920 2.9. The Commission in its Order in Case No. 107 of 2013 considered only AEC -1 and AEC -2 which were permitted to be recovered vide Order dated 5 September 2013 in Case No. 95 of 2013. AEC -3, AEC -4 and FAC were not considered as part of ABR for the re -determination of cross subsidy surcharge. 2.10. However, to give effect to the directives of the Commission in the above Orders, Additional Energy Charges (AEC) and Fuel Adjustment Cost (FAC) are being levied in the monthly energy bills of MSEDCL consumers from September 2013 and MSEDCL is being deprived of the legitimate CSS which is applicable due to change in tariff / ABR. 2.11. The Petitioner also submitted that additional FAC (along with AEC) should be considered for the calculation of CSS since the additional FAC is not the regular FAC but special FAC which is being levied as a consequence of the recent Orders in Case No. 28 of 2013, 44 of 2013 and 95 of 2013 and will remain constant for six months along with AEC. Accordingly the cross subsidy surcharge should be re -determined by considering the ABR of MSEDCL consumers including AEC -1, AEC -2, AEC -3 and AEC -4 along with additional FAC for the relevant time period. 2.12. The Petitioner referred Regulation 13 of the MERC (Distribution Open Access) Regulations, 2005 which states as under: 13.1 Every consumer and person requiring supply of electricity who has been granted open access in accordance with these Regulations shall be liable to pay a cross subsidy surcharge, as may be stipulated, as a condition for availing of open access: Provided that such cross -subsidy surcharge shall be based on the current level of cross subsidy of the tariff category / tariff slab and/ or voltage level to which such consumer or person belong or are connected to, as the case may be, and shall not be leviable if such tariff category / tariff slab or voltage level of connection does not bear any current level of cross - subsidy: 13.8 The Commission shall, based on the approved current level of cross subsidy, stipulate the cross subsidy surcharge for each approved tariff category and/or sub -category and/or tariff slab, of the Distribution Licensee. 2.13. The Petitioner further submitted that Section 86 (1)(a) of the Electricity Act, 2003 mandates the Commission to determine "Cross Subsidy Surcharge", "Additional Surcharge" and other applicable charges payable by the consumers opting for Open Access. The National Electricity Policy notified by the Central Government stipulates that "Under sub Section (2) of Section 42 of the Electricity Act, 2003, a surcharge is to be levied by the respective State Commissions on consumers switching to alternate supplies under Open Access." The policy specifies that cross subsidy surcharge is to compensate the host distribution licensee serving such consumers who are permitted Open Access under Section 42 (2) of EA 2003, for loss of cross subsidy element built into the tariff of such consumers. The National Tariff Policy further provides the "Surcharge Formula" as follows: - S = T ­ [C (1+ L / 100) + D] Where, S: Surcharge T: Tariff payable by relevant category of consumers is different C: Weighted average cost of Power Purchase of top 5% at the margin excluding liquid fuel based generation and renewable power. D: Wheeling charge L: System losses for the applicable voltage level, expressed as a percentage 2.14. The Petitioner further submitted that all the parameters are variable parameters and therefore the resultant cross subsidy surcharge is also a variable charge. 2.15. In the present Petition, MSEDCL calculated the cross subsidy surcharge payable by different consumer categories opting for Open Access based on the approvals accorded by the Commission in Order dated 16 August, 2012 in Case No. 19 of 2012, the Order dated 29 October 2013 in Case No. 107 of 2013, the Order dated 3 September 2013 in Case No. 28 of 2013, the Order dated 4 September 2013 in Case No. 44 of 2013 and the Order dated 05 September 2013 in Case No. 95 of 2013. The detailed working of the same is given below: 2.15.1. The computation of "C" is based on the power purchase quantum and cost per unit for FY 2012 -13 as approved in the Order dated 16 August 2012 in Case No. 19 of 2012. MSEDCL has considered the Merit Order Stack of power purchase as presented in the table below considering the power purchase approved in the said Order. Table 3: Merit order Stack for FY 2012 -13 submitted by MSEDCL Power Purchase Avg. Cost Stations (MUs) (Rs/Unit) RGPPL 5,256 5.81 MSPGCL Parali 6 1,426 5.26 Short Term through Exchange / Trader 10,675 4.50 MSPGCL -Nasik 3,483 4.50 NTPC -GANDHAR 1,020 4.33 CPP 900 4.25 Paras 3 1,426 4.19 NTPC -VSTP IV 381 4.17 MSPGCL -Bhusawal 2,348 4.14 Medium Term 3,141 4.10 NTPC - KAWAS GAS 1,080 4.10 Power Purchase Avg. Cost Stations (MUs) (Rs/Unit) NTPC -Kahalgaon STPS II 720 4.09 MSPGCL -Parali Unit 7 1,426 4.08 MSPGCL -Paras Unit 4 1,426 3.73 MSPGCL -Koradi 3,466 3.62 IPP - JSW 1,934 3.54 MSPGCL -Parali 3,502 3.53 MSPGCL -Khaparkheda 4,751 3.43 NPCIL -TAPP 3&4 3,293 3.01 NTPC - KSTPS III 687 2.73 MSPGCL -Chandrapur 13,362 2.66 Bhusawal Unit 5 797 2.58 NTPC -VSTP III 2,400 2.56 Adani Power 1,143 2.55 Bhusawal Unit 4 797 2.55 MSPGCL -Uran 4,111 2.47 NPCIL -KAPP 760 2.37 Mundra UMPP 1,738 2.26 NTPC -VSTP I 3,516 2.23 NTPC -VSTP II 2,940 2.20 DODSON I 42 2.18 SSP 990 2.05 PENCH 72 2.05 NTPC -Sipat TPS 4,983 2.04 Khaperkheda Unit 5 1,910 2.01 DODSON II 89 1.73 MSPGCL -Hydel 3,430 1.46 NTPC - KSTPS 5,400 1.41 NPCIL -TAPP 1&2 1,280 1.06 102,103 TOTAL PP EXCLUDING NCE Non Conv. Energy Excl CPP 7744 4.52 Total PP INCLUDING NCE 109847 3.39 2.15.2. Computation of "C" is based on the price of power from these sources and would need to be the weighted average power purchase cost of top 5% quantum of power at margin. Therefore, MSEDCL has considered Rs. 5.81 per kWh as weighted average cost of top 5% of the total power purchase. Table 4: Computation of C Station Quantum(MUs) Avg. Cost Rs./Unit RGPPL 5105 5.81 Wt Avg Cost C 5105 5.81 2.15.3. Computation of System Loss "L" is based on approved wheeling losses at the respective voltage level and transmission losses, which are then grossed up to arrive at total system losses for the Petitioner as shown in the following table: Table 5: Applicable system losses submitted by MSEDCL Particulars EHV Level 33 kV 22/11 kV LT Level Transmission Losses* (%) 4.19% 4.19% 4.19% 4.19% Wheeling Loss LT (%) 6.00% 9.00% 12.50% 0.00% Total System Losses (%) 4.19% 9.94% 12.81% 16.17% * Transmission loss is revised to 4.19% w.e.f. 1 April, 2013 vide MERC Order dated 13 May, 2013 in Case No. 56 of 2013 2.15.4. MSEDCL submitted that it has considered wheeling charge "D" as per the approval in Order dated 16 August, 2012 in Case No. 19 of 2012, as shown in the following table: Table 6: Applicable Wheeling charges submitted by MSEDCL Particulars EHV Level 33 kV 22/11 kV LT Level Wheeling charges (Rs/unit) 0 0.11 0.60 1.03 2.15.5. Computation of Average Billing Rate (ABR) "T" has been considered for each of the category of consumers as the effective average billing rate as approved by the Commission in the Order in Case No. 19 of 2012 and considering the additional energy charges (AEC -1, AEC -2, AEC -3 and AEC -4) as approved by the Orders in Case No. 28 of 2013, 44 of 2013 and 95 of 2013. The revised ABR calculation as submitted by MSEDCL is enclosed in the Annexure -I. 2.15.6. Cross Subsidy Surcharge "S": MSEDCL accordingly computed the category wise cross subsidy surcharge with components ABR, C, L and D as derived above.
(3.) In this regard, the Commission issued a Notice on 29 January, 2014 and scheduled a hearing on 13 February 2014. MSEDCL was directed to serve copies of the Petition to the authorized Consumer Representatives.;