Tariff Petition 2008-09 to 2010-11 - WBSEDCL

WEST BENGALSTATE ELECTRICITYDISTRIBUTION COMPANY LIMITEDVOLUME – ITARIFF PETITION FOR THE YEAR 2008-09,2009-10& 2010-11Submitted to theHON’BLE WEST BENGAL ELECTRICITYREGULATORY COMMISSION

BEFORE THE HONOURABLE WEST BENGAL ELECTRICITYREGULATORY COMMISSIONFiling No. _________Case No. _________IN THE MATTER OF:Petition for approval of ARR and ERC for thesecond control period ( Financial years 2008-09,2009-10, 2010-11) under Regulation 2.5.2of the West Bengal Electricity RegulatoryCommission ( Terms and Conditions of Tariff )Regulations, 2007 read with West BengalElectricity Regulatory Commission (Terms andConditions of Tariff) (Amendment) Regulations,2007.

AndIN THE MATTER OF:West Bengal State Electricity DistributionCompany Limited,Vidyut Bhawan,Block DJ, Sector – II,Bidhannagar,Kolkata – 700 091.I, Sri Dinesh Chandra Dutta son of Late Dhiraj Kumar Dutta, aged 58 years residingat 98/58 Gopal Lal Tagore Road, Kolkata – 700 036 do solemnly affirm and say asfollows:1. I am the Chief Engineer (Commercial) of the West Bengal State ElectricityDistribution Company Limited, petitioner in the above matter, and am dulyauthorised by the said petitioner to make this affidavit for and on its behalf.2. The Statements made in petition herein now shown to me and marked withthe letter “A” are true to my knowledge and based on information received andare true to my belief and nothing material has been concealed from thestatements so made, or documents or supporting data, etc., attached.Solemnly affirmed at Kolkata on this 31 st day of May, 2008 that the contents of thisaffidavit are true to my knowledge, no part of it is false or nothing material has beenconcealed therefrom and misleading material included therein.

ABEFORE THE HON’BLE WEST BENGAL ELECTRICITYREGULATORY COMMISSIONFiling No. __________Case No. __________In the matter of : Petition for approval of ARR and ERC for the second control period (Financial years 2008-09,2009-10, 2010-11) under Regulation 2.5.2 ofthe West Bengal Electricity Regulatory Commission ( Terms andConditions of Tariff ) Regulations, 2007 read with West BengalElectricity Regulatory Commission (Terms and Conditions of Tariff)(Amendment) Regulations, 2007.ANDIn the matter of : West Bengal State Electricity Distribution Company Limited, VidyutBhavan, Block – DJ, Sector – II, Bidhannagar, Kolkata – 700 091.1. The West Bengal State Electricity Distribution Company Limited, hereinafter referredto as “WBSEDCL” is a successor entity of WBSEB, came into being with effect from1 st April 2007 in terms of West Bengal Power Sector Reform Transfer Scheme 2007notified by the Govt. of West Bengal in the Department of Power and NonconventionalEnergy Sources vide Notification No. 12-PO/O/3/3R-29/2006 dated 25 thJanuary 2007 has become a Distribution Licensee under Electricity Act, 2003 andengaged in the business of generation, distribution and supply of electricity .2. This Petition for approval of ARR and ERC for the second control period ( Financialyears 2008-09,2009-10, 2010-11) is filed before the Hon’ble West Bengal ElectricityRegulatory Commission, hereinafter referred to as Hon’ble Commission, inaccordance with provisions stipulated in West Bengal Electricity RegulatoryCommission (Terms and Conditions of Tariff) Regulations, 2007 read with WestBengal Electricity Regulatory Commission (Terms and Conditions of Tariff)(Amendment) Regulations, 2007 and West Bengal Electricity RegulatoryWest Bengal State Electricity Distribution Company LimitedPage - 3

Commission (Conduct of Business) Regulations, 2007 [‘CBR’], The Electricity Act,2003 and National Electricity Policy.A3. The Hon’ble Commission vide his order dated 19.03.2008 has kindly extended thetime for submission of Petition for approval of ARR and ERC for the second controlperiod (Financial years 2008-09,2009-10, 2010-11) in respect of WBSEDCL up to31.05.2008.4. Since the Hon’ble Commission has prescribed Regulations for terms and conditionsof tariff, determination of the costs, revenue and tariffs have been done inaccordance with direction given by the Hon’ble Commission in the West BengalElectricity Regulatory Commission (Terms and Conditions of Tariff) Regulations,2007 and West Bengal Electricity Regulatory Commission (Terms and Conditions ofTariff) (Amendment) Regulations, 2007 and in accordance with the directions givenby the Hon’ble Commission in their previous tariff orders time to time.5. The filing is for the purpose of revising tariff for FY09, FY10 and FY11 based on therevenue requirement for those years calculated in terms West Bengal ElectricityRegulatory Commission (Terms and Conditions of Tariff) Regulations, 2007 readwith West Bengal Electricity Regulatory Commission (Terms and Conditions of Tariff)(Amendment) Regulations, 2007.NEED FOR TARIFF REVISION6. The existing tariff was made effective from April’ 07 as per tariff order passed by theHon’ble Commission for the year 2007-08 for WBSEDCL with an increase of 1.42paisa on an average rate compared to average rate approved for the previous yearWest Bengal State Electricity Distribution Company LimitedPage - 4

(2006-07) deducting a gain of Rs 714.30 Cr out of sale of energy to the personsother than consumers and licensee on the basis of sale of 5229.72 MU on this scoretaking into consideration of commissioning of the new units of WBPDCL in 2007-08but there is considerable delay in commissioning or commercial operation of theunits.7. Besides, Hon’ble Commission has passed an order allowing WBPDCL and DPL foran interim hike in their selling price to WBSEDCL due to hike in fuel price sinceDecember,2007. The FPA payable to NTPC Ltd. has also been increased.8. WBSEDCL humbly submits that the Hon’ble Commission may kindly consider rise inprice index, rise in power purchase cost resulting in increased cost of business.9. The Purulia Pumped Storage Project has been commissioned in the year 2007-08which results in addition of fixed asset of Rs Rs.2680 Crores in 2007-08 besidesaddition of normal fixed asset in distribution. Moreover, assets created oncompletion of rural electrification schemes under RGGVY in 10 th Plan has also beenadded in the fixed asset.10. A scheme for total capital cost of Rs 2872 Crore under RGGVY in 11 th Plan hasbeen taken up in hand and to be completed within 2010-11. The said scheme will befunded by Central Govt. Sate Govt. and WBSEDCL. These will also increase thefixed asset of WBSEDCL to a large extent in the ensuing years and as a result ofwhich the ARR for the years FY09,FY10 and FY11 will be increased.11. Besides, due to recent addition of new transmission assets, the transmission chargepayable to WBSETCL shall be enhanced considerably.12. Through this proposal of Tariff Revision WBSEDCL seeks to recover admissibleportion of such increased cost under different heads. The Hon’ble Commission maykindly allow WBSEDCL to recover such increased cost.ABASIC PREMISE IN FRAMING THE PROPOSALWest Bengal State Electricity Distribution Company LimitedPage - 5

A13. The aggregated assets and liabilities vested in West Bengal State ElectricityDistribution Company Limited in terms of “West Bengal Power Sector ReformsTransfer Scheme, 2007” notified by the Government of West Bengal has beenconsidered for estimating the expenditures under different heads. The said assetsand liabilities was prepared as per balance sheet of erstwhile WBSEB as on31/03/2006. After adjusting accounting transaction during the year 2006-07 thebalance sheet has been recast as on 31.03.07 to arrive at opening balance for theyear 2007-08. .14. The WBSEDCL has adopted the following norms while proposing tariffs for thevarious categories.• In terms of West Bengal Power Reforms Transfer Scheme total Equity of WBSEDCLwas Rs. 1942 Cr. as per Balance Sheet of erstwhile WBSEB as on 31.03.2006.Actual equity added during the year 2006-07 was 194.75 Cr. and considering thesame, the equity base considered at the beginning of the year 2007-08has beenarrived at 2136.75 Cr. Equity to be added during the years FY 09,FY10 and FY11has been considered as 270.11Cr. , 307.67Cr and 335.39Cr. respectively. Apermitted return @ 14% on the equity base arrived for the respective years hasbeen considered in the Revenue Requirement.• The Board has attempted to reduce the cross-subsidies and rationalize the tariff forthe various classes of consumers in line with Section 61(g) of the Electricity Act,2003.• The Board has already taken up various steps to reduce the T&D loss. Circle wiseATC loss is being computed and every endeavor is being made to reduce the ATCloss. In the current tariff petition for FY09,FY10 and FY11 the energy requirementhas been estimated considering normative distribution loss as per regulation framedby the Hon’ble.West Bengal State Electricity Distribution Company LimitedPage - 6

AOUTLINE OF THE TARIFF PROPOSALThe costs under various heads are as follows:Projected Projected ProjectedB. 2008-09 2009-10 2010-11WBSEDCL WBSEDCL WBSEDCL1. Fuel95.90 108.00 122.842. Power Purchase509846.65 582964.15 614204.723. Transmission Charge Paid to WBSETCL61163.00 62451.00 65827.004. SLDC Charge1300.00 1300.00 1300.005. Employee Costa)Salaries53340.31 59223.49 64195.866.b)Others (specify)Other Administrative & General Charges8372.69 10743.46 12703.607. Cost of Out sourceing3926.00 4515.00 5237.008.9.Coal & Ash HandlingRent, Rates & Taxes675.16 742.68 816.9410. Legal Charges187.15 205.87 226.4511. Auditors Fees310.00 335.00 422.0012. Repairs & Maintenance incl. Consumables12463.00 13263.40 14211.5013. a)Interest27752.00 29741.08 31348.19b)Interest on Bond For creation of Pension Fund13005.00 13005.00 13005.00c)Foreign Exchange Rate Variation0.00 0.00 0.00d)Other Financing Charges1753.69 1748.78 1180.39e)Interest on Security Deposits4334.00 4931.00 5594.00f)Lease Rental0.00 0.00 0.0014. a)Depreciation31077.12 35034.68 41560.21b)Advance against depreciation0.00 0.00 0.0015. Intangible Asset Write Off0.00 0.00 0.0016. Water Cess0.00 0.00 0.0017. Bad Debt (see regulation 4.10.1)3578.31 2732.51 3030.8818. Fringe Benefit TaxTax250.00 288.00 331.0019. Minimum Alternative tax1300.00 1300.00 1300.0020. Reserve for unforeseen exigencies2428.89 2654.27 3114.4921. Demmurage0.00 0.00 0.0022. Interest on working Capital16103.00 18173.00 18985.0023. Expenditure Related to SHREC718.43 678.71 686.7524. Total Expenditure (sum of 1:23)753980.30 846139.07 899403.83West Bengal State Electricity Distribution Company LimitedPage - 7

A2008-09 2009-10 2010-1122. Interest on working Capital16103.00 18173.00 18985.0023. Expenditure Related to SHREC718.43 678.71 686.7524. Total Expenditure (sum of 1:23)753980.30 846139.07 899403.8325. Normative Return( 14% on 30% equity)33016.00 37061.00 41562.0026. Permited Incentives0.00 0.00 0.0027. Permitted Return (25+26)33016.00 37061.00 41562.0028. Special Allocations [Form 1.21]8140.00 13095.00 3185.0029. Gross Revenue Required (24+27+28)795136.30 896295.07 944150.8330. a)Less : Other Income [Form 1.26]17202.55 18362.00 19497.79b)Less : Benefits passed on to Consumers [Form 1.24]111830.88 101755.48 91581.89c)Less : Interest credit on Depreciation1757.71 1874.83 1872.39d)Less : Expenses attributable to export92611.40 120680.03 108708.52e)Less : Revenue From Bulk Supply & Sikkim43442.40 42117.40 42117.40f)UI charges Receivable at the end of the previous year26184.83 31339.00 0.0031. Total Deductions from Gross Revenue Requirements: (30(a):30(f))293029.77 316128.74 263778.0032. Aggregate Revenue Required (29-31)502106.53 580166.33 680372.8333. Subsidy received / receivable, if any0.00 0.00 0.0034. Revenue from sale of Energy (Actual estimate)(32-33)502106.53 580166.33 680372.8335. Energy Sale to Own Consumer (MU) 14980.00 17025.00 18884.0036. Average cost of supply ( Paise/unit)335.18 340.77 360.29It reveals from above that average cost of supply for 2008-09,2009-10 & 2010-11 works outat 335.18 paise/kwh, 340.77 paise/kwh & 360.29 p/kwh respectivelyREPRESENTATIONS15. The Tariff Proposal is in six (6) volumes, as listed below.Vol.IDescriptionDetailed Tariff ProposalII, III & IV Filing formats as prescribed by the Hon’bleCommissionVVICopies of Annual Accounts of the WBSEBReport on compliance of directives given by theHon’ble Commission in the Tariff Order for 2007-08West Bengal State Electricity Distribution Company LimitedPage - 8

A16. The WBSEDCL has made every effort to meet the information requirementsprescribed by the Hon’ble Commission. Notwithstanding the same, the WBSEDCL,however, agrees to make available any further information, as and when asked forby the Hon’ble Commission.17. WBSEDCL will be procuring power from WBPDCL, DPL through WBSETCL andalso from DPSCL whose prevailing tariff has been taken into account for arriving atthe estimated cost of power procured from / through them. The interim orderspassed by the Hon’ble Commission allowing a hike in price respect of WBPDCL andDPL and the recent FPPCA order for 2006-07 in respect of WBPDCL has also beenconsidered while estimating the power purchase price. If Hon’ble Commissionrevises the tariff in respect of WBPDCL, DPL & DPSCL for the ensuing years thenthe impact of such revision may kindly be considered while allowing the powerpurchase cost of WBSEDCL during the ensuing years.18. The State Govt. revised the rate of interest on all Govt. loans to WBSEB to 2%w.e.f. 2001-02 vide G.O. dated 09.10.2002 which was subsequently withdrawn byanother G.O. dated 16.04.2004. Hon’ble Commission while passing the tariff order ofWBSEB for the year 2004-05 deducted Rs. 637.96 Cr. from the revenue requirementof WBSEB towards excess interest allowed in the earlier years on the basis of Govt.order dated 9 th October 2002 reducing the interest rate to 2% with effect from the FY2001-02. The Govt. Order dated 09.10.2002 was subsequently withdrawn restoringthe rates at which the loans were originally sanctioned. Accordingly Rs. 637.96 Cr.deducted as above now stands refundable to WBSEDCL. Necessary compliancereport has been submitted time to time. To avoid tariff shock only Rs. 31.85 Cr. @5% of the deducted amount has been claimed every year as special appropriation inthe revenue requirement for the ensuing years.19. In the tariff order for 2004-05 Hon’ble Commission kindly withhold an amount ofRs.37298 Lakh provisionally from the revenue requirement due to non submission ofWest Bengal State Electricity Distribution Company LimitedPage - 9

full documents, information, data etc. The Commission has already released Rs124.33 Cr. and Rs 100.00 Cr. through tariff for 2006-07 and 2007-08 respectively.In this tariff proposal for FY09, FY10 and FY11 one third of the balance withheldamount and two third of the balance withheld amount is being claimed in revenuerequirement for FY09 and FY10 respectively to avoid tariff shock to own consumersof the WBSEDCL.20. Hon’ble Commission passed an order on 28.02.2008 authorizing WBSEDCL to takeover the assets and liabilities of Singur-Haripal Rural Electric Co-operative SocietyLtd. (SHRELCOP). Hon’ble Commission has also authorized WBSEDCL to supplyelectricity to all the consumers of erstwhile licensee [ i.e. SHRELCOP] treating themas their own consumer. Total projected consumption in different categories ofconsumers of erstwhile Licensee [SHRELCOP] have been clubbed in the projectedcategory wise sale of WBSEDCL for the respective years.21. The required expenditure to be met for supply of consumers of SHRELCOP andrevenue requirement on account of loan liabilities and depreciation of the assetstaken over has been considered in the revenue requirement of WBSEDCL.22. Revenue income from the consumers of Singur – Haripal area has been consideredin the revenue income of WBSEDCL. Other income on account of meter rentals etcfrom the consumers of SHRELCOP has been considered in the other income ofWBSEDCL.23. In the order dated 28.02.2008 , Hon’ble Commission also directed WBSEDCL to givetheir views / information including any relevant document for the purpose of arrivingat the final statement of assets and liabilities of SHRELCOP.In compliance of thedirectives given by the Hon’ble Commission WBSEDCL submits their views /information including relevant documents for the purpose of arriving at the finalstatement of assets and liabilities of SHRELCOP. The accumulated loss arising outof taking over the assets and liabilities of SHRELCOP that may be passed on to therevenue requirement of WBSEDCL for the ensuing years.AWest Bengal State Electricity Distribution Company LimitedPage - 10

APRAYER TO THE HON’BLE COMMISSIONThe Petitioner humbly prays to the Hon’ble Commission to:(a) Accept the accompanying tariff proposal.(b) Allow gross revenue requirement at Rs. 795136.30 Cr. for FY 2008-09, Rs.896295.07 Cr. for FY 2009-10 and Rs. 944150.83 Cr. for FY 2010-11.(c) Pass tariff orders as the Hon’ble Commission may deem fit and proper keepingin mind the facts and circumstances of the case.West Bengal State Electricity Distribution Company LimitedPage - 11

TARIFF PETITION- 2008-09,2009-10 & 2010-11: TABLE OF CONTENTS :1.0 Introduction 152.0 Determining the Energy Balance2.1 Assessment of Energy Requirement 162.2 Sale to other licensee 202.3 Sale to person other than licensee or any other consumer 212.4 Estimation of Transmission & Distribution Losses 212.5 Energy Balance 233.0 Estimates of Costs3.1 Cost of Power Generation 253.1.1 Hydel Stations 253.1.2 PPSP 253.1.3 Gas Turbine Stations 273.1.4 Diesel Stations 273.1.5 Green Power 273.2 Cost of Power Purchase3.2.1& Power Purchase Planning 293.2.23.2.3 Peak Demand 313.2.4 Purchase of Power from WBPDCL 323.2.5 Purchase of Power from Durgapur Projects Ltd. 343.2.6 Purchase of Power from Damodar Valley Corporation 353.2.7 Purchase of Power from Dishergarh Power Supply Company Ltd. 363.2.8 Purchase of Power from Power Trading Corporation of India Ltd. 363.2.9 Purchase of Power from NHPC 373.2.10 Purchase of Power from NTPC Ltd. 383.2.11 Purchase of Power from WBREDA 403.2.12 Transmission Charge Payable to Different Agencies 403.2.13 UI charges & Grid Loss 404.0 Estimates of Other Costs4.1 Employee Expenses 414.2 Repair and Maintenance Expenses 434.3 Administration and Establishment Charges 434.4 Provision for Bad and Doubtful Debts 444.5 Capitalisation of Expenses 454.6 Capitalisation of Interest 464.7 Depreciation 464.8 Interest and Finance Charges 464.9 Interest on Working Capital 474.10 Reserve for Unforeseen Exigencies 474.11-Special Appropriation 474.134.14 Return on Equity 485.0 Revenue Requirement 486.0 Tariff Proposals 49West Bengal State Electricity Distribution Company Ltd. 12

TARIFF PETITION- 2008-09,2009-10 & 2010-11ABBREVIATIONS USED IN THIS DOCUMENTATC LossBTPSBKTPSCERCCBRCESCCWIPDPLDPSCLEAEHVAggregated Technical and Commercial LossBandel Thermal Power StationBakreswar Thermal Power StationCentral Electricity Regulatory CommissionWest Bengal Electricity Regulatory Commission( Conduct of Business) Regulation,2003CESC LimitedCapital Works in ProgressDurgapur Project LimitedDishergarh Power Supply Company LimitedElectricity Act,2003Extra High VoltageESA Electricity (Supply) Act, 1948FPPCAFuel and Power Purchase Cost AdjustmentFY08 Financial Year April 2007 to March 2008FY09 Financial Year April 2008 to March 2009FY08 Financial Year April 2009 to March 2010FY08 Financial Year April 2010 to March 2011GOIGOWBHVKTPSKLKWKwhSLDCGovernment of IndiaGovernment of West BengalHigh VoltageKolaghat Thermal Power StationKilo LitreKilo WattKilo Watt HourState Load Dispatch CentreWest Bengal State Electricity Distribution Company Ltd. 13

TARIFF PETITION- 2008-09,2009-10 & 2010-11L&MVMUMWNHPCNTPCNVVNLPAPLFPPAPTCSHRELCOPSTPSSgTPSSTST&DTCFTPSWBERCWBSEBWBREDAWBSEDCLWBSETCLLow Voltage and Medium VoltageMillion UnitsMega WattNational Hydro-electric Power Corporation LimitedNational Thermal Power Corporation LimitedNTPC Vidyut Vyapar Nigam LimitedPlant AvailabilityPlant Load FactorPower Purchase AgreementPower Trading Corporation of India LtdSingur-Haripal Rural Electric Co-operative SocietySantaldih Thermal Power StationSagardighi Thermal Power StationState Transmission System of WBSETCLTransmission and DistributionTeesta Canal FallThermal Power StationWest Bengal Electricity Regulatory CommissionWest Bengal State Electricity BoardWest Bengal Renewable Energy DevelopmentAgencyWest Bengal State Electricity Distribution CompanyLimitedWest Bengal State Electricity Transmission CompanyLimitedWest Bengal State Electricity Distribution Company Ltd. 14

TARIFF PETITION- 2008-09,2009-10 & 2010-11PROPOSAL FOR TARIFF REVISION TO THE HON’BLE COMMISSION1.0 INTRODUCTIONThe erstwhile West Bengal State Electricity Board [ WBSEB ] came into being on1st May, 1955 and was created under Section 5 of the Electricity (Supply) Act, 1948[“ESA”]. Under the provisions of the ESA the duties of WBSEB were to generate,transmit, distribution and supply of electricity within the state in an efficient and economicmanner. Subsequently, in exercise of the power conferred by the proviso to 172 (a) ofthe Electricity Act’ 2003, the Govt. of West Bengal has authorized the erstwhile WBSEBto continue to function as State Transmission Utility and a Distribution Licensee withembedded hydel generation. Now, in terms of “West Bengal Power Sector ReformsTransfer Scheme, 2007” notified by the Government of West Bengal in the Department ofPower and Non-Conventional Energy Sources vide Notification No. 12-PO/O/III/3R-29/2006 Dated 25 th January, 2007, WBSEB has been restructured into two successorentities viz. West Bengal State Electricity Distribution Company [ ‘WBSEDCL’ ] and WestBengal State Electricity Transmission Company [ ‘WBSETCL’ ]. The successorcompanies have started functioning from 01.04.2007.Accordingly, the Transmission and State Load Despatch unit of WBSEB have beentransferred to WBSETCL. The duties of WBSETCL is to transmit power of all poweragencies within the state of West Bengal in an efficient and economic manner incoordination with generating companies, distribution licensees operating in the state andERLDC. AND the Distribution business, Hydel Generating stations and Purulia PumpedStorage Project of WBSEB have been transferred to WBSEDCL. The duties ofWBSEDCL is to generate, distribute and supply of electricity in an efficient and economicmanner within the state of West Bengal in coordination with other Generating Companiesand Transmission Companies operating in the state.West Bengal State Electricity Distribution Company Ltd. 15

TARIFF PETITION- 2008-09,2009-10 & 2010-11THE TARIFF PROPOSAL2.0 DETERMINING THE ENERGY BALANCE2.1. ASSESSMENT OF ENERGY REQUIREMENT:2.1.1 Hon’ble West Bengal Electricity Regulatory Commission (WBERC) vide Orderdated 07/12/2006 revoked the distribution license of Singur-Haripal Rural Electric CooperativeSociety Limited (SHRELCOP) in terms of Section 19(2) of the Electricity Act,2003 with effect from 31/12/2005 directing WBSEB to act as the Administrator of theutility of SHRELCOP with effect from the day on which the distribution license ofSHRELCOP was revoked and to continue to act in that capacity until further Orders ofthe Commission in this respect. WBSEB was continuing to act as an Administrator sincethen. As a sequel of implementation of West Bengal Power Sector Reforms TransferScheme, 2007 WBSEBDCL was acting as an Administrator of the utility of SHRELCOPwith effect from 01.04.2007. Hon’ble Commission passed an order on 28.02.2008authorizing West Bengal State Electricity Distribution Company Limited (WBSEDCL) totake over the assets and liabilities of SHRELCOP with immediate effect. Hon’bleCommission has also authorized WBSEDCL to supply electricity to all the consumers oferstwhile licensee [ i.e. SHRELCOP] treating them as their own consumers.In view of above, the total projected consumption of different categories of consumers ofthe said Society have been clubbed in the projected category wise consumption ofWBSEDCL for the respective years.2.1.2 WBSEDCL has taken up a massive programme for Rural Electrification in line withthe guideline contained in the National Electricity Policy. Due to this crash programmeadditional consumers will be connected every year in rural areas during the year 2008-09,2009-10 &2010-11.2.1.3 Consumption under different categories of consumers during the year FY08,FY09, FY10 and FY11 has been estimated from the trend in growth of consumptionduring the last 3 years of the respective categories. The trend in growth of consumptionunder different category of consumers are shown in the graphs.West Bengal State Electricity Distribution Company Ltd. 16

TARIFF PETITION- 2008-09,2009-10 & 2010-11SALE IN (MU)700060005000400030003029 3118SALE PATTERN LT (DOMESTIC)5018438137803489568062172000100002003-042004-052005-062006-07YEAR2007-082008-092009-102010-11SALE PATTERN LT (COMMERCIAL)1600140012001010114412951417SALE IN (MU)1000800600688 69075887240020002003-042004-052005-062006-07YEAR2007-082008-092009-102010-11West Bengal State Electricity Distribution Company Ltd. 17

TARIFF PETITION- 2008-09,2009-10 & 2010-11140012001000800600400499619SALE PATTERN LT (INDUSTRIAL)1121991865738682122820002003-042004-052005-062006-072007-082008-09SALE IN (MU)2009-102010-11YEARSALE IN (MU)1400120010008006004002000SALE PATTERN LT (AGRICULTURE)1022895 940 892770 815115512642003-042004-052005-062006-07YEAR2007-082008-092009-102010-11SALE PATTERN HV/EHV CONSUMERSALE IN (MU)90008000700060005000400030002000100003617413446355124587465807520 84800405060708091011YEAR2003-2004-2005-2006-2007-2008-2009-2010-West Bengal State Electricity Distribution Company Ltd. 18

TARIFF PETITION- 2008-09,2009-10 & 2010-11Based on the above, consumption of WBSEDCL’s own consumers are assessed and shown in thefollowing table:-Category of ConsumersEnsuing YearOne Two ThreeProjected Projected Projected2008-09 2009-10 2010-11LOKDEEP 7.04 4.01 2.24LABOURLINE 42.13 47.70 52.25LIFELINE 43.00 51.30 57.50LT DOMESTIC 4925.91 5576.87 6104.69LT COMMERCIAL 1144.34 1294.80 1417.71LT INDUSTRIAL 990.86 1121.27 1227.88LT AGRICULTURE 1022.48 1155.28 1263.81LT PUBLIC WATER WORKS 104.54 118.32 129.57LT PUBLIC BODIES 15.30 17.23 18.83PUBLIC LIGHTING 104.41 118.22 129.51OVER ALL LT(a) 8400.00 9505.00 10404.00HT DOMESTIC 12.66 13.50 14.25HT COMMERCIAL 663.48 767.30 868.30HT INDUSTRIAL 4616.86 5339.05 6069.00TRACTION 732.80 810.00 900.00HT PUBLIC UTILITY 94.09 100.00 106.00HTPUBLIC WATER WORKS 107.79 116.00 126.00HT COMMUNITY IRRIGATION 0.00 0.00 0.00COLD STORAGE & DAIRY 336.94 357.55 379.25SPORTS COMPLEX &AUDITORIUM 2.91 3.10 3.20CONSTRUCTION 6.47 7.00 7.50PRIVATE EDUCATIONALINSTITUTION 5.75 6.00 6.00COMMERCIAL PLANTATION 0.27 0.50 0.50OVER ALL HT(b) 6580.00 7520.00 8480.00A. Overall (a+b) 14980.00 17025.00 18884.00West Bengal State Electricity Distribution Company Ltd. 19

TARIFF PETITION- 2008-09,2009-10 & 2010-112008-09 2009-10 2010-11(B) Sale to other licenseeCESC 1500.00 1500.00 1500.00DPL 50.00 0.00 0.00DPSCL 60.00 60.00 60.00Sub-total( B ) 1610.00 1560.00 1560.00( C )Sale to person other than licenseeor any other consumerSIKKIM 46.00 46.00 46.00Outside region 4648.00 6111.00 5502.00Sub-total( C ) 4694.00 6157.00 5548.00All Fig. inMUGrand Total ( A + B + C ) 19674.00 23182.00 24432.002.2. Sale to other licensee2.2.1. In terms of the rights and liabilities of WBSEB transferred to WBSEDCL with effectfrom 01.04.2007, WBSEDCL is continuing to supply to CESC LTD. at four ( 04) differentpoints as per agreement executed between CESC and WBSEB. On the basis of presenttrend of drawal by CESC Ltd., the consumption of CESC Ltd has been estimated at 1500MU every year during the years 2008-09, 2009-10 and 2010-11.2.2.2. In the tariff order dated 08.05.2006 Hon’ble Commission considered the drawal ofpower by DPSC Ltd from WBSEB at 33 KV at Bankola point as sale to DPSC Ltd. Thedrawal of power by DPSCL at Bankola has been estimated at 60 MU every year andconsidered as sale to DPSC Ltd. during the years 2008-09, 2009-10 and 2010-11. Whileestimating the sale to DPSC, their request for enhanced load at Bankola point has beenconsidered.2.2.3. In terms of an Agreement signed between Govt. of West Bengal and Govt. ofSikkim, the Board will have to make 20% of the sent out generation to Govt. of Sikkimfrom Rammam Hydel Station Stage-II at sent out cost of generation of the said PowerWest Bengal State Electricity Distribution Company Ltd. 20

TARIFF PETITION- 2008-09,2009-10 & 2010-11Station Energy to be supplied to Govt. of Sikkim has been estimated at 46 MU each yearduring the years 2008-09, 2009-10 and 2010-112.3 Sale to persons other than licensee in the state and otherconsumers:2.3.1. Sale of incidental surplus energy to the persons others than consumers andlicense during FY09,FY10 and FY11 has been estimated at 4648 MU, 6111 MU and5502 MU respectively taking into account additional surplus energy to be made availablefrom the new projects/ extension of projects of WBPDCL/ DPL after meeting therequirement of consumers, the other licensees and power required in pumping mode ofPPSP.2.4. Estimate of Transmission and Distribution Losses :2.4.1. The Hon’ble Commission has fixed year wise allowable transmission loss forWBSETCL for the years from 2008-09 to 2015-16. In terms of the said norms yearwiseallowable Transmission losses of WBSETCL for FY 09, FY10 and FY11 are given below:Year 2008-09 2009-10 2010-11Transmission loss (%) 3.90 3.80 3.70While assessing the energy balance of WBSEDCL we consider those percentage oftransmission loss for the energy to be transmitted through the system of WBSETCL toWBSEDCL system.2.4.2. The main issue in sub-transmission and distribution system is the reduction ofDistribution (T&D) losses to acceptable minimum levels. The Hon’ble Commission hasfixed year wise allowable distribution loss for WBSEDCL for the years from 2008-09 to2015-16. In terms of the said norms yearwise allowable distribution losses of WBSEDCLfor FY 09, FY10 and FY11 are given below :West Bengal State Electricity Distribution Company Ltd. 21

TARIFF PETITION- 2008-09,2009-10 & 2010-11Year 2008-09 2009-10 2010-11Dist loss (%) 18.75 18.25 17.752.4.3. However, metering at the Sub-Station up to 11Kv feeder taken up under 100%metering scheme has already been completed. The scheme for 100% metering forAgriculture consumers is in progress and expected to be completed by 31.03.2009. It isexpected that with the implementation of metering scheme in the premises of agriculturalconsumers we will be able to further reduce AT&C loss during the ensuing years.2.4.4. To reduce the Distribution loss (both technical and commercial losses) followingmeasures are taken :‣ Regular monitoring of Revenue‣ Conduct of raids by Security and Loss Prevention Wing (S&LP)‣ Introduction of High Voltage Distribution Supply (H.V.D.S.) primarily for powersupply to irrigation/agriculture consumers.‣ To facilitate energy audit, mapping and documentation of entire power network ofWBSEDCL with reference to geographical location including attributes of theattached equipment in the power network, Geographical Information System (GIS)has been taken up which is under progress. Spot billing facility for all category ofL&MV consumers under three urban Group Supply has already been in vogue andit is envisaged to extend this scheme widely.‣ Implementation of Distribution Transformer (DTR) metering to locate the lossprone areas.‣ Introduction of spot billing facility for L&MV consumersWest Bengal State Electricity Distribution Company Ltd. 22

TARIFF PETITION- 2008-09,2009-10 & 2010-112.5. Energy Balance :2.5.1. The projections for FY09, FY10 and FY11 have been carried out based on theestimated consumption, loss in distribution system of WBSEDCL and loss intransmission system of WBSETCL at the normative level as stated in earlier paragraph.2.5.2. The estimate for own consumptions at the offices and sub-stations for FY 09,FY10and FY11 has been estimated as 36 MU, 36 MU and 38 MU respectively.2.5.3. Power purchased from all the State and Central Sector Generating Stations byWBSEDCL are to be transmitted through Transmission System of WBSETCL (STS).Power Generated at the Hydel Power Stations of WBSEDCL and Purulia PumpedStorage Projects (PPSP) are also transmitted through Transmission System ofWBSETCL. So for availability of these Power at WBSEDCL system the transmission lossfor the system of WBSETCL shall have to be considered. For this purpose normativetransmission loss for the respective years has been considered. However, powerpurchases at 132 KV, 33 and 11 KV at different points from DVC, DPL, DPSC at radialmode, power purchases from Non-conventional and renewable energy sources and cogenerationto meet the local demand are directly injected to Distribution system ofWBSEDCL. Sent out energy from Diesel Generating station at Rudranagar of WBSEDCLare also injected into Distribution system of WBSEDCL.West Bengal State Electricity Distribution Company Ltd. 23

TARIFF PETITION- 2008-09,2009-10 & 2010-112.5.4. Considering all these factors the Energy Balance for WBSEDCL has been worksout as follows:2008-09 2009-10 2010-111 Generation [Form 1.3] MU A 1288.04 1288.14 1288.262 Auxiliary Consumption [Form 1.4] MU B1 8.29 8.22 8.153Transformation Loss [Form 1.4(b)] included into Aux.consumption for hydel unitsMU B2 6.64 6.60 6.564Units delivered to system from generation (including infirmpower, if any) [Form 1.5]MU C=A-B1-B2 1273.11 1273.33 1273.565 Quantunm of Infirm power included in 3 MU D 0.00 0.00 0.006 Energy Purchased at EHV [Form 1.6] MU E=E1 + E2 24912.00 29039.99 30999.00(a) Power Purchase at EHV from central sector MU E1 5463.00 6000.00 6790.00(b) Power Purchase at EHV from State sector sector MU E2 19449.00 23039.99 24209.007 Energy Received for Wheeling [Form 1.9a] MU F 0.00 0.00 0.008 CTU Grid loss for import of Central sector power MU G 199.40 219.00 247.849 Net UI [Actual] MU H 0.00 0.00 0.0010 Overall Gross Energy Input to WBSETCL System MUI = C + D +E+F -G - H25985.71 30094.32 32024.7211 WBSETCL Loss % J 3.90 3.80 3.70(a) WBSETCL Loss in MU MU K = I *J/100 1013.44 1143.58 1184.9112 Net Energy available from WBSETCL System MU L = I - K 24972.27 28950.73 30839.8013 Energy sold to other than licensee at EHV [Form 1.9b] MU M 4648.00 6111.00 5502.0014 Energy sold to licensee at EHV [Form 1.9b] MU N 1596.00 1546.00 1546.0015Units sold/ used for pumping energy of Pumped StorageProjectMU O 1050.00 1050.00 1050.0016 Total Energy goes out from WBSETCL System at EHV MU P = M + N + O 7294.00 8707.00 8098.0017Net Energy available from WBSETCL System toWBSEDCLMU Q = L - P 17678.27 20243.73 22741.8018 Energy purchased by WBSEDCL at 33 KV & below MU R 875.61 699.61 335.6119 Total Energy available to WBSEDCL system MU S = Q + R 18553.88 20943.34 23077.4120 Units sold to consumers MU T 14980.00 17025.00 18884.0021 Energy sold to licensee below EHV level [Form 1.9b] MU U 60.00 60.00 60.0022 Units wheeled [Form 1.9c] MU V 0.00 0.00 0.0023 Units utilised in own premises including construction power MU W 36.00 36.00 38.0024 Overall Utilisation MU X=sum(T:W) 15076.00 17121.00 18982.0025 Unutilised Units MU Y=S - X 3477.88 3822.34 4095.4126 System Loss % Z = Y/ S *100 18.74% 18.25% 17.75%West Bengal State Electricity Distribution Company Ltd. 24

TARIFF PETITION- 2008-09,2009-10 & 2010-113.0. ESTIMATES OF COSTS3.1. Power Generation :In terms of the West Bengal Power Sector Reforms Transfer Scheme, 2007 all theexisting Hydel Power stations, all Gas turbine Units and Diesel Generation units with allassociated and related equipments of WBSEB have been transferred to WBSEDCL fromthe effective date. The Purulia Pumped Storage Project (PPSP) under construction hasalso been transferred to WBSEDCL from the effective date ( 01.04.07).3.1.1 Hydel Stations :The main hydel stations of WBSEDCL, namely the Rammam and Jaldhaka areworking at reasonably high PLF. But the generation at TCF hydel power station cannotbe achieved at the designed value due to constraint towards release of 330 Cumec ofwater as per DPR for non completion of Dauk-Nagar Main Canal by I&W Departmentand frequent shut down of Main Canal for long periods.Generation at different hydel power station during FY09, FY10 and FY11 havebeen estimated considering the present trend of generation and the target maintenanceprogramme of respective power stations.3.1.2 Purulia Pumped Storage ProjectPurulia Pumped Storage Project with an installed capacity of 900 MW (4 x 225MW) was taken up in hand in Ajodhya hills in the District of Purulia of West Bengalunder P.S. Bagmundi with the loan assistance of Japan Bank for InternationalCooperation (JBIC) erstwhile Overseas Economic Cooperation Fund (OECF) few yearsback. Four units of the Purulia Pumped Storage Project (PPSP) has already beencommissioned and the date of synchronization / Commercial operation of the four unitsare given below. Two 400 kV double circuit transmission lines connecting Durgapur andArambag 400 KV S/Stn. with PPSP have been constructed for transmitting and receivingpower from PPSPWest Bengal State Electricity Distribution Company Ltd. 25

TARIFF PETITION- 2008-09,2009-10 & 2010-11Unit Date of synchronization /Commercial operationUnit-IV 10/10/2007Unit-III 12/11/2007Unit-I 31/01/2008Unit-II 06/02/2008Like other regions of the Country there is a peaking power shortage in theEastern Region at present. West Bengal is at present having a peak shortage of about9%. Massive rural electrification by 2012 will increase the demand further. Beforecommissioning of PPSP the state had an Hydro-Thermal mix of 3:97. Sufficient thermalcapacity will be added in the state sector by 2012 and there will be adequate surplusenergy during the off peak period. This surplus energy will be utilized as pumping energyat PPSP to generate power during peak hours as per system requirement.The Purulia Pumped Storage Project (PPSP) is not merely a capacity additionproject, It helps to stabilize the power system in the state as well as in the country. Thusit stabilizes the grid system, contributes quality power and meets peak demand. Becauseof enhanced use of generation capacity in the off-peak hours there would be animprovement of Plant Load Factor (PLF) and the efficiency and life of thermal plants inthe state will get increase.Truly speaking the power to be generated from PPSP would have a positiveimpact on the power system in the state and in the national grid also.PPSP with a generation of 800 MU per annum will contribute less than 5% of totalprocurement of WBSEDCL in a year. There will be no adverse effect on revenuerequirement of WBSEDCL rather there will be a cost benefit since the peak power pricecan be considered at the highest UI rate of Rs. 10.00 / unit under present systemcondition.West Bengal State Electricity Distribution Company Ltd. 26

TARIFF PETITION- 2008-09,2009-10 & 2010-11Annual generation at PPSP at a level of 800 MU during the year 2008-09, 2009-10and 2010-11 has been estimated according to the system requirement during peak hoursconsidering optimum utilization of the surplus energy mainly during off peak hours.3.1.3 Gas Turbine Stations :The gas turbine power station at Kasba ( 2X 20 MW) , Haldia (2 X 20MW) andSiliguri ( 1X 20 MW) built up in late seventies during the period of severe power crisiswere operated primarily during the peak hours and also beyond peak hours under severepower shortage conditions at that time. Consequent upon improvement in power positionin mid-eighties, the gas turbine stations were only operated during emergency. Sincethese power stations were not utilised on regular basis no major investment was made tokeep these power station in running condition. Hence due to normal wear and tear of theequipment these power stations are now lying in defunct condition.As such, no generation from these power stations as well as no cost for those Stationshas been considered for the ensuing years.3.1.4 Diesel Stations :At present the Board is maintaining diesel generation plant only at Rudranagar inSagar Island. In view of excessive cost associated with diesel generation, generationfrom diesel generating plants had to be restricted and the same has been supplementedby other source of power i.e. from non-conventional energy sources. The load inRudranagar in Sagar Island is now being catered partly through Diesel generation andpartly from Non-conventional energy sources (Solar Power). The level of dieselgeneration at lone Power Station at Rudranagar is low. In absence of adequate capacityaddition from non-conventional sources and to meet the increased load demand duringprevious years a new desesel set of capacity of 320 KVA has been commissioned in2007-08. Energy to be available from this diesel based generating stations has beenestimated at 1.04 MU, 1.14 MU and 1.26 MU in FY09, FY10 and FY11 respectively.3.1.5 Green Power :Like previous years, Hon’ble Commission in the Tariff Order for 2007-08 kindlydirected WBSEDCL to explore the possibilities of purchase of power from renewable andWest Bengal State Electricity Distribution Company Ltd. 27

TARIFF PETITION- 2008-09,2009-10 & 2010-11non-conventional sources of energy and co-generation sources like, coke-oven plantsetc. Hon’ble Commission has also stipulated the year wise quantum of energy to beprocured from non-conventional and renewable sources of energy and expressed inpercentage of net energy requirement for the respective year. WBSEDCL is making allendeaver to procure that quantum of power but acheving to that stipulated percentagedepends on the availibily of power from those sources at that level.With the financial grant of IREDA, WBSEDCL has commissioned its new hydelpower stations (3 MW) at Mongpoo-Kalikhola in the district of Darjeeling which is purely agreen power project. Annual Generation from the said power station has been estimatedat 6 MU for the years 2008-09,2009-10 and 2010-11.Besides, WBSEB entered into Power Purchase Agreement with number ofentrepreneurs mainly bio-mass based power plant and the process of entering into PPAwith number of entrepreneurs who are setting up their small hydel plant, bio-massbased power plants, co-geration power plant and intending to sell power to be generatedat their plant to WBSEDCL, are presently going on.WBSEDCL is already purchasing power from the Co-generation Plant of M/s.Electro Steel Castings Ltd. at Haldia since March’ 2006 and during 2007-08 M/s. ElectroSteel Castings Ltd. had supplied 82.63 MU of energy to WBSEDCL. Similarly, WBSEDCLis also purchasing power from the small hydel plant of M/s. Neora Hydel Power Ltd. atChalsa since April’ 2006 and from the small hydel plant of M/s Nippon Power Ltd inDarjeeling district since April 2007. M/s. Neora Hydro Ltd. and M/s. Nippon Power Ltd.had supplied 2.41 MU and 7.01 MU of energy respectively to WBSEDCL during 2007-08. Considering that trend of generation of all these non-conventional power sources,yearly energy available from the above power plants has been estimated at a level of 90MU for FY09, FY10 and FY11.In addition, the power plant being set up by Hooghly Metcoke Ltd. at Haldia,District – Purba Medinipur has been transferred to Tata Power Ltd. Tata Power Ltd. hasbeen agreed to sell 20 MW of Power from their power plant to WBSEDCL. Execution ofthe Power Purchase Agreement (PPA) for purchase of the 20 MW power to beWest Bengal State Electricity Distribution Company Ltd. 28

TARIFF PETITION- 2008-09,2009-10 & 2010-11generated from the said plant is under process. Considering the present status of work,of the said plant and the other plants to come up with co-generation and non–conventional sources, annual generation from those proposed plant ( other green power)has been estimated at 75 MU during the years 2008-09, 2009-10 and 2010-113.2. Cost of Power Purchase :3.2.1. On implementation of West Bengal Power Sector Reform Transfer Scheme 2007WBSEDCL becomes the Distribution Licensee as a successor entity of WBSEB.Accordingly WBSEDCL is continuing to purchase power in the same manner as wasfollowed by erstwhile WBSEB from different power supply agencies namely West BengalPower Development Corporation Ltd (WBPDCL), the Durgapur Projects Limited (DPL),Dishergarh Power Supply Company Limited (DPSC), the Damodar Valley Corporation(DVC), National Thermal Power Corporation Limited (NTPC), National Hydro PowerCorporation (NHPC), the Power Trading Corporation (PTC). On commissioning of TalaHydro Electric Power in Bhuttan since August’ 2006, MOP Govt. of India has allocatedpower from Tala HEP to the State of West Bengal with equivalent curtailment of sharefrom ISGS Power Stations of NTPC in Eastern Region. This power from TALA HEP isbeing imported for different States in India by PTC.3.2.2. WBSEDCL will also purchase green power from the West Bengal RenewableEnergy Development Agency (WBREDA) and from other non-conventional sources ofenergy developed by private entrepreneurs during the ensuing years 2008-09, 2009-10and 2010-11. The planning of power purchase is done by WBSEDCL keeping in view thefollowing aspects:• Estimated system demand for the ensuing years based on the projectedload growth.• Maximum generation that may be available from the Hydel Power Stationsof WBSEDCL• Commitment to meet the peak system demand.• Optimisation of power purchase cost with an eye on merit order purchaseas far as practicable.West Bengal State Electricity Distribution Company Ltd. 29

TARIFF PETITION- 2008-09,2009-10 & 2010-11• Reduction in purchase of energy from DVC, DPL and DPSCL in radialmode by way of taking over the loads in steps.• Requirement of pumping energy for optimum utilisation of PPSP to meetthe peak system demand.WBSEDCL is trying to follow the principles for purchase of power on merit orderbasis as directed by the Hon’ble Commission but there are certain practical constraints instrictly following the same. Though WBSEDCL has taken initiative to take over the loadof Asansol area which are now being supplied radially from DPSC and DVC substationsin staggered manner, still it will continue the existing arrangement of purchase of somequantum of power in radial mode from DVC (at 33 KV), DPL (at 33 KV & 11 KV) -around Durgapur area and DPSC (at 11 KV) at Asansol area for catering its ownconsumers irrespective of the tariff of these agencies during the ensuing years. Butthese loads are being taken over in stages by way of developing infrastructure. Secondly,the entire generation (sent out) of the WBPDCL and surplus power of DPL at 132 KVinterconnecting mode is to be accommodated by the WBSEDCL through purchase.Thirdly, the WBSEDCL has to import power from Central Sector Power Stations e.g.NTPC, NHPC Ltd up to the complete level of allocated share in order to reduce theburden of fixed charge, which otherwise would have to be shouldered by theWBSEDCL’s consumers due to increase in per unit purchase cost for drawing lesserquantum of power. In the above context it is also a fact that after meeting therequirement of consumer, other licensees of the state and requirement of pumpingenergy of PPSP there will be some incidental surplus energy. This incidental surplusenergy available in the WBSEDCL system mainly during off-peak hours will be sold toothers on long term basis resulting in reduction of overall revenue requirement ofWBSEDCL. While releasing the radial loads from DVC, WBSEDCL will take up with DVCfor supplying some quantum of power through grid. It may, therefore, be appreciated thatthe WBSEDCL has very little room to strictly follow merit order power purchase plan.West Bengal State Electricity Distribution Company Ltd. 30

TARIFF PETITION- 2008-09,2009-10 & 2010-113.2.3. Peak demand of WBSEDCL system including supply of power to CESC Limitedduring the year 2007-08 has been indicated in the following table:MonthSystem Demand(MW)April ' 07 3335May' 07 3150June' 07 3100July' 07 3190Aug' 07 3275Sep' 07 3345Oct’ 07 3275Nov’07 2975Dec ‘07 2855Jan ‘08 2900Feb’08 3080The maximum system demand recorded during the year 2007-08 ( upto Feb’08)was 3345 MW. Considering the load growth and availability of power during the ensuingyears the maximum system including supply of power to CESC Limited to be met duringthe years FY09,FY10 and FY 11 has been estimated at 3746MW, 4120 MW and 4532MW respectively.The projected maximum system demand for the ensuing years as indicated in theabove table does not include the demand of WBSEDCL which will be met through radialmode of purchase from DVC at 132 KV, 33 KV and 11 KV, from DPL at 33 and 11 KVand from DPSC at 11 KV. However with the commissioning of Asansol 220 KV Substationin 2007 and construction of associated 11 KV lines which is now in progress aload of 50 MW at Asansol area will be shifted to WBSEDCL’s system. This will reducethe drawal of power from DVC and DPSCL at radial mode to that extent during theensuing years. With the commissioning of 132 KV sub-station at Barjora and the 132 KVSub-station at Belmuri, WBSEDCL will be in position to reduce its drawal at radial modefrom DVC at those area during the ensuing years. However,considering load growth andstabilisation of new unit of WBPDCL,WBSEDCL will continue to purchase equivalentWest Bengal State Electricity Distribution Company Ltd. 31

TARIFF PETITION- 2008-09,2009-10 & 2010-11amount of power through grid.Hence total purchase from DVC through grid and at radialmode will remain at the same level.3.2.4. Purchase of Power from WBPDCL :a) Kolaghat Thermal Power Station :In West Bengal Electricity Regulatory Commission (Terms and Conditions ofTariff) (Ammendment) Regulations, 2007 notified vide no 38/WBERC dated 31/12/2007,Hon’ble Commission has specified year wise norms for the operating parameters e.gPLF, percentage auxiliary consumptions, heat rate etc for the different generatingstations of WBPDCL. As per that stipulated norms as above, net energy to be availablefrom WBPDCL’s Kolaghat Thermal Power Station to WBSEDCL during the ensuingyears FY09, FY10 and FY11 will be 7045 MU, 7152 MU and 7260 MU respectively.b) Bakreswar Thermal Power Station :At Stage-I Bakreswar of WBPDCL has 3x210 MW Generating Sets with a totalcapacity of 630 MW. As per the norms stipulated by the Hon’ble Commission 4018 MU (net energy) will be available every year from the first three units of Bakreswar ThermalPower Station during the ensuing years FY09, FY10 and FY11.Energy to be available from the new Units at Bakreswar Thermal Power Station (Unit IVand Unit V) has been considered separately.Last year a huge quantum of energy was considered to be available from the new unitsof WBPDCL in our tariff petition as well as in the tariff order passed by the Hon’bleCommission for the year 2007-08 and a sizable amount was deducted from the ARR for2007-08 on account of benefit to be passed on to the consumer for supply of energy tothe persons other than consumer and licensee. But no unit of WBPDCL was availableduring last year and as a matter of that WBSEDCL could not avail that level of benefitthat had been considered in the tariff order by selling the surplus power to the personsother than consumer and licensee. As per information received from WBPDCL recentlywe have estimated net energy to be available from the new units of Bakreswar ThermalPower Station considering 80% PLF for eight months from one unit (Unit IV) and fourmonths from another unit (Unit V) during FY09 and at 80% PLF from both units duringWest Bengal State Electricity Distribution Company Ltd. 32

TARIFF PETITION- 2008-09,2009-10 & 2010-11FY10 and FY11.However, if any such energy is not available from those units in theensuing years the adverse impact of that may be considered in the APR for therespective years.c) Bandel Thermal Power Station :Bandel Thermal Power Station (BTPS) has 4x60 MW (derated) and 1X210 MWGenerating Sets with a total capacity of 450 MW. As per the norms stipulated by theHon’ble Commission net energy to be available from the Bandel Thermal Power Stationduring the ensuing years FY09, FY10 and FY11 has been estimated at 2008 MU, 2153MU, 2263 MU respectively.d) Santaldih Thermal Power StationThe Santaldih Thermal Power Station (STPS) is having existing four units of 120MW each with a total capacity of 480 MW. As per the norms stipulated by the Hon’bleCommission net energy to be available from the existing four units of Santaldihi ThermalPower Station during the ensuing years FY09, FY10 and FY11 has been estimated at1343 MU, 1420 MU, 1499 MU respectively.One new 250 MW unit has been commissioned at STPS at the end of 2007-08. To bemore realistic and in keeping in view all factors, computing total available generation fromSTPS additional energy to be available from the new unit during the ensuing years FY09,FY10 and FY11 has been estimated at 650 MU, 950 MU, 950 MU respectively.Thus the quantum of energy to be purchased from STPS has been estimated at1993 MU, 2370 MU and 2449 MU during FY09, FY10 and FY11 respectively. Duringdiscussion with WBPDCL, it appeared that projected energy is realistic.e) Sagardighi Thermal Power Station ( SgTPS)One unit of capacity 300 MW at Sagardighi Thermal Power Station has beencommissioned in February, 2008 and the second unit of 300 MW is at construction stageand expected to be commissioned this year. It is reported that the unit which wascommissioned in February this year had developed fault in the turbine blade and requirereplacement. As information gathered from WBPDCL recently that both the units will beWest Bengal State Electricity Distribution Company Ltd. 33

TARIFF PETITION- 2008-09,2009-10 & 2010-11available from Sept this year. But the energy may be available at a PLF of 50% atpresent due non completion of coal linkage. Considering the same energy to be availableduring FY 10 and FY11 from both the units has been estimated at a PLF of 65% and 80respectively. Accordingly, total energy to be available from the new units of 300 MWcapacity each at SgTPS has been estimated at 1395 MU, 3109 MU and 3826 MUduring FY 09, FY 10 and FY11 respectively.3.2.5. Purchase of Power from the Durgapur Projects Ltd. :The Durgapur Projects Limited (DPL) is supplying power to WBSEDCL at 33 KVand 11 KV on radial mode to meet the local demand of WBSEDCL’s consumers at thatarea. WBSEDCL and DPL have entered into a PPA and as per the PPA, DPL had drawnpower from WBSEDCL at 220 /132 KV during the last two years due to prolonged outageof Unit - VI. With the re-commissioning of the unit –VI and putting into commercialoperation of the new Unit – VII of capacity 300MW DPL is now in a position to supplypower to WBSEDCL at 220/132 KV on interconnected mode after meeting their owndemand. DPL will also supply its surplus power to WBSEDCL at 132/220 KV oninterconnected mode.Considering the trend of drawal from DPL at 33 KV and 11 KV during last twoyears and keeping in view that transfer of a portion of this radial load to WBSEDCLsystem in 2009-10 and 2010-11 with the development of WBEDCL system in that areathe quantum of energy to be purchased from Durgapur Projects Limited at 33 KV and 11KV on radial mode during the year 2008-09, 2009-2010 and 2010-11 has been estimatedas below:Voltage 2008-09 2009-10 2010-11At 33 KV 141 MU 70 MU 20 MUAt 11 KV 8 MU 8 MU 4 MUKeeping in view of the load growth in DPL system and present trend of availabilityfrom DPL after putting in operation of unit -VI and commercial operation of new 300 MWWest Bengal State Electricity Distribution Company Ltd. 34

TARIFF PETITION- 2008-09,2009-10 & 2010-11unit of DPL (Unit VII) purchase during the year 2008-09, 2009-10 and 2010-11 has beenestimated at 1050 MU, 970MU and 870 MU respectively.3.2.6 Purchase of Power from the Damodar Valley Corporation:WBSEDCL purchases power from Damodar Valley Corporation both outsidevalley and within the valley area at 132 KV and 33 KV. A small quantum of energy is alsopurchased at 11 KV. The petitioner also purchases power from DVC at 132 KV atBelmuri outside the valley area to meet the demand of the Eastern Railway for tractionpurpose. Power is also purchased from DVC at 33 KV at Belmuri outside the valley areasince the WBSEDCL is yet to develop net work for feeding in those area from its ownsystem. However, WBSEDCL has been contemplating to develop its own system atthose area to dispense with purchase of power from DVC at 33 KV.To reduce drawl of power from DVC ,erstwhile WBSEB had started constructionof an EHV Sub-station at Asansol which has already been commissioned last year. NowWBSEDCL is developing its distribution system at those areas and will be in a position totake over some load which is now being met from DVC and DPSC and DPL system atradial mode into its own system. WBSETCL is also set up one 132/33 KV Sub-station atBorjora within the valley area of DVC. Consequent upon commissioning of the said EHTSub-stations, WBSEDCL will not only take over the existing load of Borjora area, which isnow being met from DPL and DVC, but will also meet the future load demand of Borjoraarea through its own system. Though that load will come up in WBSEDCL’s system tomeet that load from its own system WBSEDCL shall have to purchase additionalquantum of power from DVC through grid.Considering the above fact and trend of drawal, future load growth at those areathe quantum of energy to be purchased by WBSEDCL from DVC in radial mode duringthe year 2008-09,2009-10 and 2010-11 has been estimated at 446 MU, 446 MU and246 MU respectively.WBSEDCL will purchase 425 MU during 2007-08, 425 MU during 2009-10 and 680 MUduring the year 2010-11 through grid to meet its demand as stated above.West Bengal State Electricity Distribution Company Ltd. 35

TARIFF PETITION- 2008-09,2009-10 & 2010-11Besides, WBSDCL has been entitled to get 40 MW power round the clock fromMejia-V, likely to be commissioned this year. Accordingly a quantum of 125 MU, 250 MUand 250 MU has been estimated to be purchased from DVC from Mejia-V during theyear2008-09,2009-10 and 2010-11 respectively.3.2.7 Purchase of Power from the Dishergarh Power Supply Company Limited :WBSEDCL used to purchase power from Dishergarh Power Supply Co. Ltd at 11KV at 18 locations and also used to supply power to Dishergarh Power Supply Co. Ltd at33 KV at Bankola. DPSC Ltd have been raising electricity bills to WBSEDCL on accountof import of energy at 18 locations. Energy supplied at Bankola to the DPSC Ltd hasbeen considered as sale of power to DPSC Ltd.Considering reduction in drawl from DPSCL due to commissioning of EHV sub-station atAsansol and subsequent on going development of distribution system at that areapurchase of power from DPSCL during the year 2008-09, 2009-10 and 2010-11 hasbeen estimated at 205 MU,100 MU and 50 MU respectively.Since WBSEDCL purchases power from DPSC for onward sale to its ultimateconsumers at low and medium voltage only at those area, the existing tariff of DPSCLapplicable for sale to WBSEDCL is comparatively higher than the average tariff for intralicenseesale of power. Hon’ble Commission may kindly look into this aspect.3.2.8 Purchase of Power through Power Trading Corporation of India Limited :A. Purchase of power from Chukhha and Kurichhu HEPThe Hydel Power Station at Chukha has a capacity of 336 MW out of which 270MW is allocated for Eastern Region. The original share of WBSEB from Chukha HydelPower Station was 29.10%. Since subsequently, 15% of the unallocated share has beendistributed to the constituents of the Eastern Region in proportion to the original share,the share of WBSEB in respect of Chukha Hydel Power Station was revised to 37.40%.This share, was subsequently revised downward to 31.85% w.e.f October, 2004.WBSEDCL as a successor entity of WBSEB is entitled to have this share from ChukhaHEPWest Bengal State Electricity Distribution Company Ltd. 36

TARIFF PETITION- 2008-09,2009-10 & 2010-11As per the policy of the Govt. of India, WBSEDCL is entitled to have its share fromKurichhu Hydel Power Station in Bhutan as successor entity of WBSEB. The installedcapacity of this Hydel Power Station is 60 MW. The share of WBSEDCL from this PowerStation is 50%. WBSEB started drawing power from this Power Station with effect fromNovember 2001.WBSEDCL is importing power from those power stations (Chukha HEP andKurichhu HEP) through Power Trading Corporation India Ltd ( PTC Ltd.) during theensuing years as per allocated share.Total quantum energy that would be drawn annually by WBSEDCL from Chukha &Kurichhu HEP during the years 2008-09, 2009-10 and 2010-11 has been estimated at721 MU.B. Purchase of power from TALA HEPAs per order of MOP, GOI, 38.25% of share from Tala HEP having installedcapacity of 6 x 170 MW has been allocated to WBSEDCL (West Bengal) in lieu ofequivalent thermal power from NPTC’s Stations in ER region. The power is beingpurchased through PTC as per bilateral arrangement between GOI & Royal Govt. ofBhutan. Energy to be available from TALA HEP during the years 2008-09, 2009-10 and2010-11 have been estimated at 1330 MU every year.3.2.9 Purchase of Power from the NHPC :The erstwhile WBSEB was purchasing power from the Rangeet Hydel PowerStation of National Hydro-Electric Power Corp. Ltd. installed in the State of Sikkim. Asper the policy of the Govt. of India, WBSEDCL is entitled to have share of the generationas allocated to erstwhile WBSEB. The installed capacity of Rangeet Hydel Power Stationis 60 MW and the allocated share to WBSEB from this power station was 40.73% up toSeptember, 2004. The share has been reduced to 28.43% w.e.f October, 2004 and thesame is being continued.West Bengal State Electricity Distribution Company Ltd. 37

TARIFF PETITION- 2008-09,2009-10 & 2010-11achieved. On the basis of revised allocation of share as shown above and considering80% PLF, the energy to be purchased from Farakka STPS during the year 2008-09,2009-10 and 2010-11 has been estimated at a level of 1936 MU every year.Kahalgaon Thermal Power Station (KhSTPS) Stage I :In terms of order of MoP, Govt. of India re-allocating share of Eastern Regionalstates in consideration of allocation of power from TALA HEP, WBSEDCL’s allocationform NTPC’s Kahelgaon Stage-I Thermal Power Station has been withdrawn.However, a share of 83 MW of power has been allocated to WBSEDCL from KhSTPSStage II as stated earlier. Energy to be available against that allocated share of 83 MWpower has been estimated at 206 MU, 618 Mu and 618 MU respectively during the years2008-09 2009-10 and 2010-11 and to be paid at the same rate of FSTPS.Talcher Thermal Power Station (TSTPS) :NTPC’s power station at Talcher has 2x500 MW i.e. total capacity of 1000 MW. Forthe purpose of availing incentive NTPC will have to maintain availability above 80%. Onthe basis of actual availability and considering allocated share of power from TalcherThermal Power Station, WBSEDCL’s drawal from that power station has been estimatedat 624 MU every year during the ensuing years 2008-09, 2009-10 and 2010-11.CERC introduced multi year ABT Tariff for the block 2004-2009 in respect of CentralSector Power Stations, erstwhile WBSEB was required to pay Fixed Charges of NTPCPower Stations as per share allocation. As such, in the event the drawl of Central SectorPower less than allocation during off peak hours, per unit cost of purchase of power willbe higher for the payment of total Fixed Charge as per allocated share and therebyincrease the revenue requirement which would ultimately lead to increase in averagecost for sale of power. Thus, the admissible share of NTPC’s Power Station has to beavailed fully. After meeting the requirement of the consumers and the other licensees ofthe state and also the requirement of pumping energy at PPSP during off peak period theincidental surplus energy will be sold to others through competitive bidding.West Bengal State Electricity Distribution Company Ltd. 39

TARIFF PETITION- 2008-09,2009-10 & 2010-113.2.11 Purchase of power from WBREDA :It has been observed through collection of wind data of different zones of WestBengal that only Sagar Island and Frazerganj areas of South 24 Parganas district hasadequate wind speed for running of wind generator. WBREDA installed one Wind FarmProject (1MW at Ist stage and another 1 MW at 2 nd stage) at Frazerganj. A dedicated 11KV grid line has been constructed from Namkhana to Frazerganj for evacuation of powerfrom Wind farm Project. It has been estimated that 0.41 MU of energy will be purchasedevery year from WBREDA during the ensuing years 2008-09,2009-10 and 2010-1.3.2.12 Transmission Charges Payable to Different Agencies :Transmission charge are payable to POWERGRID against purchase of powerfrom the Central Sector Generating Stations against the drawal of power from NTPC,PTC (Chukha Power and KURICHHU), TALA HEP, NHPC (Rangeet Power) attransmission tariff of POWERGRID in Eastern Region.WBSEDCL would also have to pay a proportionate cost to SLDC to the tune of Rs. 13 Cr.every year which includes ERLDC charge, ULDC charge and SLDC Charge for usingboth Central and State grid.3.2.13 UI Charges and Grid Loss :In ABT regime WBSEDCL would have to furnish every day its scheduled drawalfrom central sector generating stations for the next day in 96 time blocks (block of 15minutes). This scheduled drawal is at the bus-bar of the generating station. To get theenergy available at the WBSEDCL’s system we have to consider the loss in state grid.Besides WBSEDCL may have pay or realize UI charges due to mismatch in scheduleand actual drawal during any 15 minutes time block. But for estimate purpose no UI isconsidered for the years 2008-09,2009-10 and 2010-11 as all surplus energy has beenWest Bengal State Electricity Distribution Company Ltd. 40

TARIFF PETITION- 2008-09,2009-10 & 2010-11projected for sale to persons other than licensees in the State or own consumers. Thebenefit estimated out of it has been passed on to consumer as per norms.4.0 ESTIMATE OF OTHER COSTSThe aggregated assets and liabilities vested in West Bengal State ElectricityDistribution Company Limited in terms of “West Bengal Power Sector Reforms TransferScheme, 2007” notified by the Government of West Bengal has been considered forestimating the expenditures under different heads. The said assets and liabilities wasprepared as per balance sheet of erstwhile WBSEB as on 31/03/2006. After adjustingaccounting transaction during the year 2006-07 the balance sheet has been recast as on31.03.07 to arrive at opening balance for the year 2007-08. Similarly to arrive at theestimated cost for the different heads under other cost for the year 2007-08 the costinvolved for the functions of generation and distribution of the erstwhile WBSEB andproportionate cost under corporate head during the year 2006-07 has been considered.4.1 Employee Expenses :WBSEDCL supplies power mostly in rural and remote areas. Because of thedemographic and geographic considerations, WBSEDCL is left with no choice but tomaintain a certain minimum level of employees to provide service to its consumers.The existing staff strength of WBSEDCL as on 01.04.2007 has been assessed21109 in terms of the provision of the “West Bengal Power Sector Reforms TransferScheme, 2007”. The stated number will further increased to 21634, as assessed, at theend of the financial year 2007-2008 through general separation.The assessed staff strength at the end of 31.03.09 will be 22138 after considering1872 nos. of retirement and recruitment of 1376 nos. The same are assessed for 2009-10 & 2010-11 as 20688 and 18766 nos. respectively.In the instant Tariff proposal, the element of DA has been considered as per orderof Govt. of West Bengal issued time to time in the year 2006-07. As per recent Govt.order, 50% of the DA will be merged with the basic pay of the employees with effect fromWest Bengal State Electricity Distribution Company Ltd. 41

TARIFF PETITION- 2008-09,2009-10 & 2010-1101.04.2007 and DA element in line with the Govt. Order as declared with effect from01.04.2007 has also been considered. However any further increase in DA during theyear 2007-08 by the likely announcement of the State Government will come asadditional expenditure. Two nos. of additional DA @6% each as declared by CentralGovt. Has been considered for employee cost for the year 2008-09 along with a 3%normal increase due to increment, promotion and other staff benefit comprising a total of15% of hike in Pay, DA, HRA. For 2009-10 & 2010-11,the DA hike is considered @10%each year.With regard to Overtime payments, the Petitioner states that overtime is allowedonly to technical staff who are engaged to attend emergency breakdown beyond normalhours particularly during the rainy and festive seasons to minimise the period ofinterruption and that too is done in public interest. Disallowance of such payments wouldseverely affect the quality of supply and hence it is petitioned that Overtime expensesmay be allowed as estimated.Employee Cost for the year 2008-09, 2009-2010 & 2010-2011(Rs. in crore)Heads of Emp. Cost 2007-08 2008-09 2009-2010 2010-2011Basic Pay – (as per existing pay structure)155 158 161 164Dearness Pay 78 79 81 82Dearness Allowance 56 88 114 141House Rent & Other Allowance 60 60 55 55Bonus 12 10 10 10Overtime 15 15 15 15Salary of New Recruitment 0 10 3 3Additional pay due to pay restructuring(Remunartion Committee) 0 23 42 41Other Staff Related Expenses i.e. LTC,Medical Re-imbursement, E.L.Encashment, Premium for GroupInsurance and others 49 51 70 80Terminal Benefits 159 92 95 100Total Employee Cost 584 586 646 691Less : Capitalization 67 53 54 50Net Employee Cost Charged in the Tariff 517 533 592 641West Bengal State Electricity Distribution Company Ltd. 42

TARIFF PETITION- 2008-09,2009-10 & 2010-114.2. Repair and Maintenance (R&M) Expenses :In order to deliver power at reasonable quality parameters and to reduceinstances of outages, WBSEDCL has taken up various schemes in Distribution. Besidesdistribution assets, WBSEDCL has added Generation assets of PPSP of Rs.2680Crores in 2007-08 and will be adding distribution assets of Rs. 639.60 Crores from itsown fund and deferent schemes in the year 2008-09. This requires additional R&Mexpenses during the year 2007-08. Considering this WBSEDCL will require Rs 124.63Crore in FY08-09 to meet its R&M requirements. For 2009-10 & 2010-11 it is estimatedby Trend Analysis along with other factors.The details of the estimated cost for the year 2007-08 & 2008-09 are given below:(Rs in crore)Particulars2007-08(Estimated) 2008-09 (Estimated)Repair & Maintenance to Plant & 36.67 39.80MachineryRepair & Maintenance to 8.13 8.80BuildingsCivil Works 1.42 1.40Hydraulic Works 2.03 2.42Repair & Maintenance to 55.97 63.93Distribution lines and cablesRepair & Maintenance to Vehicles 0.11 0.13Repair & Maintenance to 0.87 .96Furniture & FixturesRepair & Maintenance to Office 5.92 7.20EquipmentTotal 111.13 124.634.3. Administration and General Expenses :It is estimated that Rs 86.95 crores and 95.45 crores will be required during 2007-08 and 2008-09 to meet the Administration and General Expenses respectively. Due toincrease of activity of consumers' services, revenue monitoring, drive against theft ofpower, there will be increase in vehicle running expenses, vehicle hire charges, travelingWest Bengal State Electricity Distribution Company Ltd. 43

TARIFF PETITION- 2008-09,2009-10 & 2010-11expenses and also training & legal expenses. Due to shortage of staff WBSEDCLdecided to outsource some of its services in the recent past. It is estimated that Rs 30.35crores and 39.26 crores will be required during 2007-08 and 2008-09 to meet the cost ofoutsourcing. For the year 2009-10 and 2010-11, the estimate is done through TrendAnalysis and considering other related factors.Erstwhile WBSEB has decentralized the activity of the Loss prevention wing(S&LP) up to Circle level. One sub-unit is also started functioning in Asansol area from2006.07. Moreover the tamperer working with the present day static meters are regularlyadopting new technology and loss protection wing are being equipped with moderndevices and techniques for detection of theft and reducing loss of the company.The details of the Administration and General Expenses are given in the table below:(All figures in Rs Crore)Particulars 2007-08(Estimated)2008-09(Estimated)Rent, Rates & Taxes 5.95 6.75Insurance 2.00 1.76Telephone & Trunk Calls, Postage & 9.28 10.55TelegramLegal Charges 1.72 1.87Audit Fees 0.35 3.10Conveyance & Travel 21.30 23.78Printing & Stationery 4.34 4.89Service Charges (For P/T Employees) 3.36 3.64Freight & Related expenses 3.97 4.12Others 34.68 34.99Total 86.95 95.454.4. Provision for Bad and Doubtful Debts :In terms of the West Bengal Electricity Regulatory Commission (Terms andConditions of Tariff) Regulations, 2007, Hon’ble Commission may allow bad debts asactually had been written off in the latest available Audited Accounts subject to a ceilingof 0.5% of the value of gross fixed assets at the beginning of the year.West Bengal State Electricity Distribution Company Ltd. 44

TARIFF PETITION- 2008-09,2009-10 & 2010-114.5. Capitalisation of Expenses :Capitalization of expenses are generally made by the erstwhile WBSEB with theprinciple that the actual cost that would be required during the year for the constructionactivities are to be capitalized. This year we also follow the same methodology.Besides, Generation Units, WBSEDCL has got several Distribution Units havingseparate field office for construction as well as (O&M) jobs. WBSEDCL decided that thefollowing quantum of the expenses on account of Salary, Overtime, D.A. and otherallowances of the respective offices as shown against each should be capitalized.Sl.No Type of UnitRate ofCapitalisation1 Construction Divisions/All Projects under constn. 100%2 Dist. HQ 60%3 Corporate Office 60%4 Material Controller 60%5 Distribution Circle Office/Zonal Office 18%6 Uluberia, Coochbehar, Asansol& Durgapur Dist 20%(O&M) Divn.7 Alipurduar Dist (O&M) Divn. 33%8 Jalpaiguri Dist (O&M) Divn. 40%9 All other O&M Divisions (Dist. ) 12%10 Darjeeling Constn-cum-(O&M) Division 57%11 Hydel/Gas Turbine/Salt Lake Complex/HRD 0%Further 100% expenditure on a/c of other Employees cost, Admn. & Gen.Expenses, maintenance expenses, Finance Charges (Bank Charges/Commission), otherdebits i.r.o. Construction Units (Sl.No. 1) should also be capitalized.In accordance with the above, the amount involved for capitalization out of totalexpenses has been calculated for the year 2007-08Capitalisation of expenses other than interest has been estimated for the year2007-08 amounting to Rs 71.34 crores. And for the year 2008-09 it amounts to Rs.78.36crores. The break up of the above figure is given below:West Bengal State Electricity Distribution Company Ltd. 45

TARIFF PETITION- 2008-09,2009-10 & 2010-11(Rs. in crore)Item 2007-08(Estimated)2008-09(Estimated)Employee Cost 67.00 74.14Admn. & Other Expenditure 4.13 4.21Other finance charges 0.21 0.01Total 71.34 78.364.6. Capitalisation of Interest :The rate of capitalisation of Interest during 2007-08 and 2008-09 are worked out at45% and 20%. Considering the same, the amount of capitalisation of interest for FY07-08and FY08-09 has been estimated at Rs 124.28 Crores and Rs.74.04 Crores.4.7. Depreciation :In the WBERC (Terms & Conditions of Tariff) Regulations, 2007, Hon’bleCommission has stipulated that depreciation would be calculated annually based onstraight-line method at the prescribed rates. Depreciation shall be allowed up to maximumof 90% of the original cost of the assets. Cost of depreciation of assets of WBSEDCL,which will be in service during the year 2007-08 and 2008-09 has been computed atRs.235.57 and Rs.310.77 Crores respectively on the basis of above methodology.4.8. Interest and Finance Charges :Details of Govt. Loan and loan from other financial institution and calculation of Interestthere on for all the years are given in the Form-C of Vol-II.West Bengal State Electricity Distribution Company Ltd. 46

TARIFF PETITION- 2008-09,2009-10 & 2010-114.9. Interest on Working Capital :In the WBERC (Terms & Conditions of Tariff) Regulations, 2007, Hon’ble Commissionhas kindly assessed the Working Capital requirement on normative basis @18 % onestimated annual sale revenue reduced by the amount of Depreciation, DeferredRevenue Expenditure and Return on Equity.4.10. Reserve for Unforeseen Exigencies :In the WBERC (Terms & Conditions of Tariff) Regulations, 2007, Hon’bleCommission has kept provision for allowing a reserve for dealing with UnforeseenExigencies up to 0.25% of the value of Gross Fixed Assets at the beginning of the year.4.11. Release of Withheld and Admissible Amount on account of change in theinterest rate on Govt. Loans :In the tariff order for 2004-05 Hon’ble Commission kindly withhold an amount ofRs.37298 Lakh provisionally from the revenue requirement due to non submission of fulldocuments, information, data etc. The Commission has already released Rs 124.33 Cr.and Rs 100.00 Cr. through tariff for 2006-07 and 2007-08 respectively.In this tariff proposal for FY09, FY10 and FY11 one third of the balance withheldamount and two third of the balance withheld amount is being claimed in revenuerequirement for FY09 and FY10 respectively to avoid tariff shock to own consumers ofthe WBSEDCL.The State Govt. revised the rate of interest on all Govt. loans to WBSEB to 2%w.e.f. 2001-02 vide G.O. dated 09.10.2002 which was subsequently withdrawn byanother G.O. dated 16.04.2004. Hon’ble Commission while passing the tariff order ofWBSEB for the year 2004-05 deducted Rs. 637.96 Cr. from the revenue requirement ofWBSEB towards excess interest allowed in the earlier years on the basis of Govt. orderdated 9 th October 2002 reducing the interest rate to 2% with effect from the FY 2001-02.The Govt. Order dated 09.10.2002 was subsequently withdrawn restoring the rates atwhich the loans were originally sanctioned. Accordingly Rs. 637.96 Cr. deducted asabove now stands refundable to WBSEDCL. Necessary compliance report has beenWest Bengal State Electricity Distribution Company Ltd. 47

TARIFF PETITION- 2008-09,2009-10 & 2010-11submitted time to time. To avoid tariff shock only Rs. 31.85 Cr. @ 5% of the deductedamount has been claimed every year as special appropriation in the revenue requirementfor the ensuing years.4.12. Hon’ble Commission passed an order on 28.02.2008 authorizing WBSEDCL totake over the assets and liabilities of Singur-Haripal Rural Electric Co-operative SocietyLtd. (SHRELCOP). Hon’ble Commission has also authorized WBSEDCL to supplyelectricity to all the consumers of erstwhile licensee [ i.e. SHRELCOP] treating them astheir own consumer. WBSEDCL has taken over the assets and liabilities of the erstwhilelicensee SHRELCOP on 29.05.2008. The required expenditure to be met for supply ofconsumers of SHRELCOP and revenue requirement on account of loan liabilities anddepreciation of the assets taken over has been considered in the revenue requirement ofWBSEDCL. Revenue income from the consumers of Singur – Haripal area has beenconsidered in the revenue income of WBSEDCL4.13. Return on Equity :In terms of West Bengal Power Reforms Transfer Scheme total Equity ofWBSEDCL was Rs. 1942 Cr. as per Balance Sheet of erstwhile WBSEB as on31.03.2006. Actual equity added during the year 2006-07 was 194.75 Cr. andconsidering the same, the equity base considered at the beginning of the year 2007-08has been arrived at 2136.75 Cr. Equity to be added during the years FY 09,FY10 andFY11 has been considered as 270.11Cr. , 307.67Cr and 335.39Cr. respectively. Apermitted return @ 14% on the equity base arrived for the respective years has beenconsidered in the Revenue Requirement5.0. REVENUE REQUIREMENT FOR FY 08The total revenue requirement for FY 09, FY10 and FY11 are given in the Form E inAnnexure 1 in data format volume ( volume II)West Bengal State Electricity Distribution Company Ltd. 48

TARIFF PETITION- 2008-09,2009-10 & 2010-116.0. TARIFF PROPOSALSSalient Features of Changes proposed :1) Proposed Retail tariff for all categories of consumer are given in Annexure III indata format volumes. Retail tariff are proposed for the financial years 2008-09,2009-10 and 2010-11 to match with the average cost of supply for therespective years and keeping in mind the provisions of the Electricity Act,2003.2) No change in the rate of energy charge for Life Line Domestic consumers hasbeen proposed for 2008-09. However the same is proposed to increase during2009-10 and 2010-11.3) Fixed charge in Rs/consumer/month for LT Domestic category including Life lineconsumers has been proposed.4) Fixed charge now being realized in Rs/consumer/month for LT commercialcategory has been proposed to be changed to in Rs/KW/month.5) The rate for minimum charges is proposed to be re-introduced for LT commercialcategory.6) The existing rate of minimum charge for LT Domestic category has been proposedto be enhanced7) No change in the rate of demand charge for HV and EHV consumers has beenproposed for the year 2008-09 and 2009-10 but the same is proposed to beenhanced during the year 2010-11.8) Time period for peak hours and off-peak hours has since been changed last year.The percentage rate considered for computation of energy charge during peakhours and off-peak hours from the rate of energy charge during normal period inrespect of HV and EHV industrial consumers is proposed to be changed so thatthe average rate remains nearer to the non-TOD rate for the industries runningthree shifts at uniform load.9) The rate for energy charge for industrial consumers taking supply at 33 KV isproposed to be reduced by 7 paise/kwh during year 2008-09 and 2009-10 to makethe tariff for that category of consumers competitive. However the rate has beenWest Bengal State Electricity Distribution Company Ltd. 49

TARIFF PETITION- 2008-09,2009-10 & 2010-11proposed to be enhanced slightly during 2010-11 to match with the average costof supply during the year.10) The rate for energy charge for industrial consumers taking supply other than 33KV is proposed to be kept at same level during 2008-09 and 2010-11. But thesame has been proposed to be enhanced during 2010-11 to match with theaverage cost of supply during the year.11) The existing rate of P.F. rebate upto 95 % P.F has been proposed to be keptunaltered. However, the rate for P.F above 95% has been proposed to beenhanced.12) In the amended Regulations on Terms and Conditions of Tariff the formula forcomputation of L.F for the purpose of billing has since been stipulated consideringthe contract demand or maximum demand recorded whichever is higher in steadof standing formula for LF considering recorded maximum demand only the slabsfor the rate for L.F. rebate and surcharge is proposed to be restructuredaccordingly. The new formula for computation of L.F for the purpose of billing isproposed to be effective from the date of effect of the revised tariff for 2008-09.13) The minimum billing demand for HV and EHV consumers shall be 85% of thecontract demand as per amended Regulations on Terms and Conditions of Tariffand proposed to be effective from the date of effect of the revised tariff for 2008-09.14) In some forum IT sector is often termed as industry, whereas commercial rate ofenergy consumption is normally applicable. Therefore a new rate for IT sectortaking supply at HV & EHV is proposed to be introduced under commercial HighVoltage category keeping the rate for energy charge at 10 Paise less than the ratefor commercial consumers at respective category.West Bengal State Electricity Distribution Company Ltd. 50

TARIFF PETITION- 2008-09,2009-10 & 2010-1115) Consequent upon provision of a separate tariff for single point supply to bulk cooperativesat high/medium voltage in the tariff order for the year 2007-08, anattempt was made to introduce single point supply at high voltage to the HousingComplexes/Bulk Co-operatives. But the said move is not being accepted by mostof the Housing Developers and most of the developers have been insistingindividual supply to the dweller in the Housing Estate on WBSEDCL. In thatcontext it is felt that separate tariff for single point supply to HousingComplexes/Bulk Co-operatives can hardly be implemented by WBSEDCL inspiteof the fact that the said tariff is lower than the high voltage domestic tariff S(d)incorporated in the tariff order. To avoid the difficulty being faced by WBSEDCL asmentioned above it is proposed that the single point supply at high voltage to theHousing Complexes/Bulk Co-operative shall be made mandatory for any Cooperativeshaving more than 24 flats. In the event it is considered by the Hon’bleCommission that the tariff for single point supply at high voltage to the BulkHousing Co-operatives/Society as incorporated in the tariff order for the year2007-08 shall be kept optional, Hon’ble Commission may kindly evolve a suitablemechanism so that techno commercial loss associated therewith is suitablycompensated. In the event supply of power at high voltage at single point to theBulk Housing Complexes/Bulk Co-operative Societies is kept optional by theHon’ble Commission it is proposed to fix the monthly minimum charge payable byindividual consumer at the Housing Complex/Bulk Co-operatives at Rs. 400/- permonth per K,W. of the sanctioned load as applicable to high voltage domesticconsumers in terms of tariff order of the Hon’ble Commission for the year 2007-08.West Bengal State Electricity Distribution Company Ltd. 51