Report of Indian Institute of Public Administration ... - Ministry of Power

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
Table: Financial Performance of HPGCL
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Fixed cost (Thermal +Hydro)
O & M Cost Rs Crs 188.94 180.97 236.28 136.28 313.8504 300.23
Depreciation Rs Crs 61.53 50.57 -19.41 111.64 124.10 129.8
Interest Charges Rs Crs 81.08 55.82 110.01 165.10 150.11 125.41
Interest on Working Capital Rs Crs 10.26 10.43 7.70 4.83 15.08 29.46
Total Fixed Cost Rs Crs 341.81 297.79 334.58 417.85 603.14 584.9
Variable Cost Rs Crs 547.09 566.32 762.07 993.35 1095.60 1191.62
Total Cost Rs Crs 807.82 808.29 986.64 1411.20 1548.63 1651.11
Net Generation Mus 3603.66 3371.76 4611.48 5580.29 6283.07 6180.00
Variable Cost per Unit Rs/unit 1.52 1.68 1.65 1.78 1.74 1.93
Total Cost per unit Rs/unit 2.24 2.40 2.14 2.53 2.46 2.67
(Source: HVPNL)
Note: Return on equity has been allowed in Tariff @ 5 per cent in 2004-05 and @ 8 per cent in 2005-06 and @
10 per cent in 2006-07 on capital at the beginning of the year.
HPGCL has been able to get only operational expenses as pass through as it was
supplying power to HVPNL. It is only after enactment of the EA, 2003 that HPGCL
was subjected to tariff approval by the State Electricity Regulatory Commission. The
HPGCL has substantial loan portfolio from the new projects undertaken/planned by
the utility. As on April 2006, HPGCL loans are of the order of Rs 3,200 crore of which
secured loans are Rs 665 crore only. As regard losses though the position has not
deteriorated, yet HPGCL has not turned into a profit-making company. Now it is time for
HPGCL to ask for return on equity and get the admissible return so that in course of time it
turns into a profit-making entity.
Variable Cost
The variable cost of generation is increasing rapidly for HPGCL plants. While the
variable component was 67 per cent of total cost of generation in 1999-2000, the same
stands high at 72 per cent of the cost of generation in 2004-05.
The return on equity provides around 10 per cent, which is lower than the returns
approved by CERC for the central sector generating stations. The lower returns are on
account of the high cost of generation by HPGCL plants.
A comparative analysis of HPGCL stations with the overall performance of Rajasthan
Rajya Vidyut Utpadan Nigam Limited (RRVUNL) is provided below. The
performance of the stations is almost comparable, however, the fuel cost in case of
Haryana is on the higher side which may be partly attributed to the quality and cost of
fuel (including transit and handling charges) being used in generation.
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