Executivesummary 2010 11

Executive Summary of ARR filing of DHBVNL for Distribution and Retail
Supply Business for FY 2010-11
1. This Executive Summary of Annual Revenue Report (ARR) of Distribution and

Retail Supply (D&RS) Business for FY 2010-11 presents here the key elements of
the ARR filing made by Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL)
to the Haryana Electricity Regulatory Commission (the Commission) .
1.1 This summary is not a part of the filings made by DHBVNL and interested
parties are encouraged to examine the documents filed by the licensee for
detailed information. Further, some of the annexure mentioned and
references made in this document may not be included in this summary and
would be available only with the complete document filed with the
Commission. In the present filing for FY 2010-11, DHBVNL has also
submitted figures for FY 2008-09 (Audited Actuals).
1.2 The submission contains the Aggregate Revenue Requirement forms that include
computation of Capital Base, Expenditure, Employment Data, Non - Tariff
income, Revenues for the ensuing financial year at current tariff and other
financial formats as per HERC tariff regulations. Other details include audited
financial statement as at March 31, 2008 and Basis of Projections for FY 2009-10
& FY 2010-11.
2. Aggregate Revenue Requirement: The following forms present the consolidated

position for Distribution & Retail Supply Business carried out by the DHBVNL and
projected for the ensuing year.
Profit & Loss Account All figures in Rs Crores
Particulars PY CY EY
Actual Estimated Projection
A Revenue
1 Revenue from sale of power 3187.72 3261.99 4160.40
2 Other Non-tariff income 152.42 171.22 193.03
3 Revenue subsidies 1005.34 1155.00 1199.25
Total Revenue or Income 4345.48 4588.21 5552.69
B Expenditure
1 Purchase of Power 3453.22 4972.74 5573.18
Executive Summary of ARR for FY 2010-11 – DHBVN 1

3 Intra-State Transmission Charges 252.15 290.34 290.34
4 Repairs and Maintenance 33.39 58.64 83.97
5 Employee costs 492.69 511.03 510.60
6 Administration and General expenses 62.12 73.15 88.00
7 Net prior period credit/(charges) -0.42 0.00 0.00
8 Other Debits, Write-offs 44.63 51.56 161.30
9 Extraordinary items 0.00 0.00 386.10
10 Less: Expenses Capitalized 3.77 6.00 9.57
C PBDIT 11.49 -1363.25 -1531.24
D Depreciation and Related debits 97.01 86.60 132.74
E PBIT -85.52 -1449.85 -1663.97
1 Interest & Finance Charges 244.82 359.33 585.14
2 Less: Interest Capitalized 65.08 88.90 141.12
F Total Interest and Finance Charges 179.74 270.43 444.02
G TOTAL EXPENDITURE 4610.75 6308.49 7660.68
H Profit/Loss before Tax -265.27 -1720.28 -2107.99
I Income Tax provisions
J Profit/Loss after Tax -265.27 -1720.28 -2107.99

Balance Sheet Form No: DS2
All figures in Rs Crores
I. SOURCES OF FUNDS
A) Shareholders’ Funds
a) Share Capital 946.42 1190.87 1492.73
b) Reserves and Surplus -1233.75 -3120.75 -5437.72
B) Special Appropriation towards Project Cost
C) Loan Funds
a) Secured Loans 931.64 1681.69 2895.47
b) Unsecured Loans 1451.84 2620.70 4512.22
D) Other sources of Funds
a) Capital contributions from consumers 535.78 613.51 691.13
b) Consumers’ Security Deposits 461.84 539.80 622.02
TOTAL SOURCES OF FUNDS 3093.77 3525.81 4775.83
II. APPLICATION OF FUNDS

A) Fixed Assets
a) Gross Block 2292.38 3571.66 4825.67
b) less: Accumulated Depreciation 843.14 972.51 1148.13
c) Net Block 1449.24 2599.14 3677.53
d) Capital Work in Progress 706.68 471.64 730.37
B) Investments 32.48 35.13 37.59
C) Current Assets, Loans and Advances

i) Current Assets 2206.27 2192.37 2426.63
ii) Loans & Advances 54.93 56.76 56.35
D) less: Current Liabilities and Provisions
i) Current Liabilities 1644.28 2117.69 2441.09
ii) Provisions
E) Net Current Assets 616.92 131.44 41.89
F) Miscellaneous Expenditure to the extent not written 288.46 288.46 288.46
TOTAL APPLICATION OF FUNDS 3093.77 3525.81 4775.83

DS3:Cash Flow Statement
Particulars CY EY
Estimated Projection
I Net Funds from Operations:
1 A. Net Funds from Earnings:
Profit before Tax -1887.00 -2316.97
Less:
Subsidy and Grants 1155.00 1199.25
Income Tax payment during the year 0.00 0.00
Total of A -3042.00 -3516.22
B. ADD: Debits to Revenue Account not requiring Cash Outflow:
(i) Depreciation 129.37 175.62
(ii) Amortisation of Deferred Cost
(iii) Amortisation of Intangible Assets
(iv) Investment Allowance Reserve
(v) Others, if any.
Total of B 129.37 175.62
C.LESS: Credits to Revenue Account not invloving Cash Receipts:
(i) Depreciation
(ii)
Total of C 0.00 0.00
Net Funds from Earnings (A+B-C) -2912.63 -3340.60
2 Contributions, Grants and Subsidies towards Cost of Capital Assets 77.73 77.62
3 Security Deposit from consumers 77.96 82.22
4 Proceeds from disposal of Fixed Assets
5 Total Funds from Operations (1+2+3+4) -2756.93 -3180.77
6 Net Increase/(Decrease) in Working Capital:
A. Increase/(Decrease) in Current Assets:
a) Inventories -35.67 67.21
b) Receivables against sale of power 0.00 -100.08
c) Loans and Advances 1.83 -0.41
d) Sundry Receivables 35.73 211.12
Total of A 1.89 177.84
B. Increase/(Decrease) in Current Liabilities:
a) Borrowings for working capital 473.41 323.40
b) Other Current liabilities - Power purchase
- Others
Total of B 473.41 323.40
Net Increase/(Decrease) in Working Capital (A - B) -471.52 -145.56
7 Net Funds from Operations before Subsidies & Grants (5-6) -2285.41 -3035.21
8 Receipts from Revenue Subsidies and Grants 1155.00 1199.25
Total I Net Funds from Operations including Subsidies & Grants (7+8) -1130.41 -1835.96
II Net Increase /(Decrease) in Capital Liabilities:

A. Fresh Borrowings:
(a) State Loans 0.00 0.00
(b) Foreign currency Loans/Creditrs
( c) Other Borrowings 3085.79 4100.44

Total of A 3085.79 4100.44
B. Repayments:
Repayment of Principal
(a) State Loans 6.04 5.56
(b) Foreign currency Loans/Creditors
( c) Other Borrowings 1160.86 989.57
Total of B 1166.90 995.14
Total II Net Increase /(Decrease) in Capital Liabilities (A - B) 1918.90 3105.30
III Increase/(Decrease) in Equity Capital 244.45 301.86
IV Total Funds available for Capital Expenditure (I+II+III) 1032.94 1571.20
V Funds Utilised on Capital Expenditure:

(a) On Projects 1279.28 1254.01
(b) Released Assets reissued to works -291.60 201.98
( c) Intangible Assets
(d) Deferred Costs 56.57 56.74
Total of V 1044.24 1512.73
VI Net Increase/(Decrease) in Investments 2.65 2.46
VII Net Increase/(Decrease) in Cash & Bank Balance (IV - V - VI) -13.95 56.01
VIII Add: Opening Cash & Bank balances 222.90 208.95
IX Closing Cash & Bank Balances (VII+VIII) 208.95 264.96

Annual Revenue Requirement Form No: DS4
Power Purchase (MU) 13181 15556 18933

Sale of Power (MU) 9860 11823 14579
Loss % 25% 24% 23%
1 Receipts
a Revenue from tariffs & Miscell. Charges 3340.14 3433.21 4353.44
b Revenue subsidy from Govt. 1005.34 1155.00 1199.25
Total 4345.48 4588.21 5552.69
2 Expenditure
a Purchase of Power 3453.22 4972.74 5573.18
c Intra-State Transmission Charges 252.15 290.34 290.34
d R&M Expense 33.39 58.64 83.97
e Employee Expenses 490.27 506.62 502.94
f A&G Expense 60.77 71.56 86.08
g Depreciation 97.01 86.60 132.74
h Interest & Finance Charges 244.82 359.33 585.14
i Less: Interest & other expenses capitalised 65.08 88.90 141.12
j Other Debits (incl. Prov for Bad debts) 44.63 51.56 161.30
k Extraordinary Items 0.00 0.00 386.10
l Other (Misc.)-net prior period credit/ (charges) -0.42 0.00 0.00
Total 4610.75 6308.49 7660.68
3 Reasonable Return 132.50 166.72 208.98
4 Other Income
5 Annual Revenue Requirement (2)+(3)-(4) 4743.25 6475.21 7869.66
6 Surplus(+) / Shortfall(-) : (1)-(5) -397.77 -1887.00 -2316.97

before tariff revision
7 Tariff Revision Impact
8 Surplus(+) / Shortfall(-) : (6)-(7) -397.77 -1887.00 -2316.97

after tariff revision

Reasonable Return Form No: DS5
Shareholders’ Funds
1 Share Capital 946.42 1190.87 1492.73
Total Equity 946.42 1190.87 1492.73
Return as a % of Equity (14%) 14% 132.50 166.72 208.98

Energy Balance Form No: DS7
MU MU MU
Gross Energy Procured from out of state sources (MU) 13750.9 19826 18663
Inter state transmission loss % 4.23% 4.23%
Inter state transmission loss (MU) 839 789
Net Energy available from out of state sources (MU) 18988 17874
Add energy generated within the State (MU) 12792 20805
Net Energy available for use in Haryana 31779 38679
Intra - state transmission loss (%) 2.10% 2.10%
Intra - state transmission loss (MU) 667 812
Energy available for sale to distribution licensees 26360.08 31112 37867
Energy Available for DHBVN 13180.04 15556 18933
3 Distribution Loss 25.19% 24% 23%
2 Energy Sales within the state

a) LT Sales 6922.99 8497.47 10283.20
b) HT Sales 2937.00 3325.04 4295.42
c) EHT Sales
Total Energy Sales 9859.99 11822.51 14578.63

3. Basis for projecting individual items in the Balance Sheet
3.1 Share capital –
(a) After the trifurcation of HSEB and creation of two different utilities
Government of Haryana holds100% equity in the utilities. The Equity
Share Capital of DHBVN as on 1st April 2009 is Rs.946 Crores and with
the fresh equity infusion of Rs.244 Crore during FY 2009-10, is
expected to increase to Rs.1191 Crores the end of the financial year
2009-10.
(b) It is further expected that with the fresh equity infusion of Rs.302 Crore
during FY 2010-11, equity share capital by the end of FY2010-11 will
increase to Rs.1413 Crores.
(c) Equity Share Capital support is being made by the Government as part of
source of funding to the capital expenditure. For the FY 2010-11 the
share of Equity support by the State Government to the capital
investment plan is projected to be Rs.1493 by the end of FY2010-11
3.2 Contingency Reserve – A certain portion of revenue was earlier transferred to

contingency reserve to meet the contingency requirement. However, in terms of
Hon’ble Commission directions in ARR order for FY08-09 and also in terms of
Tariff Regulations, 2008, no fresh contribution is being made to the reserve
since FY08-09. However, interest earned out of contingency reserve funds is
being re-invested. The contingency reserve which was Rs.3.25 Crore as the end
of FY 08-09 is expected to swell to Rs.3.50 Crore by the end of FY 2009-10
and to Rs.3.75 Crore by the end of FY 2010-11
3.3 Capital Consumer Contribution and grants –
(a) The amount of consumer contribution represents the share of initial

amount taken from the consumer at the time of new connection and it
grows in proportion to new connection. During FY 2008-09, Rs.111
Crore was received by way of consumer contribution because of release
of large number of new connections and it is projected that it will grow
a bit slow than the last year. Projection has been made after considering
the contribution per increase in consumers and for the both projected
years the amount has considered as Rs.90 Crore.
(b) The capital grants are received from various agencies for improving the
efficiency and various electrification programs like APDRP, PMGY,
MPLAD Scheme and grant received from REC under RGGVY.
(c) During FY 2009-10, the Nigam is estimating a receipt of Rs.31 Crores by

way of grant and during the ensuing FY 2010-11, the projection for
capital grants is again Rs.31 Crores

Particulars FY 2009-10 FY 2010-11
Grant under MPLAD Scheme 0.50 0.50
Grant under RGGVY Scheme 30.00 30.00
TOTAL 30.50 30.50
3.4 Consumers Security Deposits – Consumer security deposit is the security given
by Consumers at the time of new connection and the same has been projected
on the basis of the growth in number of the consumers and the average security
deposit per consumer for the previous years. The security deposit receipts
projected for the FY 2009-10 and FY 2010-11 is Rs.77.96 Crores and Rs.82.22
Crore respectively
3.5 Loan Fund -
(a) The projection for the capital loan funds is based on the investment plan.
The total requirement of the funds is first meet out by the equity share
support by the State Government, consumer contribution from the
consumers and capital grant. The remaining amount has been considered
as the capital loan.
(b) The detail summary of the capital loan and short term loan has been
provided in DF9 and DF-9(a).
3.6 Gross Fixed Assets(GFA)
(a) Gross Fixed Assets has been projected on the basis of the total investment
plan for the year. It is assumed that 70% of the total investment plan
will be transferred to the fixed assets and the opening balance of the
CWIP is also assumed to be converted into GFA during the financial
year. The summary of the projection for the gross fixed assets is shown
in the table given below:
Particulars Current Year 2009-10 Ensuing Year 2010-11
Opening Balance 2292.38 3571.66

Add: Additions to GFA 1279.28 1254.01
Less: Retirements 0.00 0.00
Total 3571.66 4825.67
3.7 Retirements and disposal of asset has been assumed to be zero for both the
projected years.
3.8 The category wise addition in respect of GFA has been assumed on the basis of
the average of the addition made during the last seven years. The following
table shows the break up of the asset to be added during the projected years.
Asset Type Percentage to total addition

Land 0.34%
Building 2.26%
Plant & Machinery 96.46%
Vehicles 0.38%
Furniture and Fixtures 0.57%
Total 100%
3.9 Provision for Depreciation –
(a) As per Tariff Regulations, 2008 the provision for depreciation on new
assets i.e. assets added after 31.3.2005 needs to be provided at the rates
prescribed in the appendix to Regulations.
(b) However, it is not possible to classify the projected additions in fixed

assets sub-categories wise. As such, the Nigam has considered the
deprecation rate on Plant & Machinery to be equal to the rate prescribed
for Transformers i.e. 3.60% p.a.
(c) The depreciation charged at the new rates is added to the opening balance
of the provision for depreciation. The summary of the calculation of
depreciation has been briefed in the subsequent sections of the ARR.
Asset Type Opening Addition Disposal At the end of

Balances as on during the during the year march
1-4-2010 year year 2011
Land - - - -
Building 21.38 2.71 - 24.09
Plant & Machinery 936.30 169.95 - 1106.25
Vehicles 10.28 1.72 - 12.00
Furniture and Fixtures 4.56 1.24 - 5.80
Total 972.51 175.62 - 1148.13
(d) The depreciation charged during the year is being reduced by the amount
attributable to the fixed asset created out of the consumer contribution
and capital grant.
(e) Accumulated deprecation as on 1st April 2009 was Rs.843.14 Crore and it
is expected to increase by 15 % for ensuing FY 2010-11. The projection
of accumulated deprecation is based on the projected assets growth rate
in coming years after adjusting the depreciation on fixed assets against
consumer contribution.
3.10 Net block of Fixed Assets: Net block of fixed assets is the net of the gross fixed
assets (GFA) and accumulated deprecation. The net fixed asset of the Nigam
were Rs.1191.66 Crore in FY 2008-09 and are expected to grow by more than
300% to Rs.3677.53 Crore at the end of FY 2010-11 over FY 2008-09, due to
higher amount of capital investment.

3.11 Capital work in progress – Capital work in progress depends on the capital
expenditure plan and the rate of assets capitalization for the year. It is assumed
that 30% of the total capital investment plan during a financial year is expected
to remain under the head Capital work in progress The summary of calculation
of CWIP is shown in the table given below:
CWIP 2009-10 2010-11

Opening Balance 706.68 340.30
Total Capex addition during the year 818.00 1305.30
Expenses Capitalized 94.90 150.69
Transfer to GFA 1279.28 1254.01
Closing Balance 340.30 542.28
3.12 Contingency Reserve Investment - Contingency reserve investment with

HPGCL is Rs.32.48 Crore at the end of FY 2008-09. However since FY08-09,
as detailed above, no fresh investment are being made in Contingency Reserve
Investment and the only addition to the fund is the reinvestment of interest
accrued on existing fund. The balance of contingency reserve investment is
estimated to be Rs.35.13 Crore at the end of FY2009-10 and Rs.37.59 Crore at
the end of FY 2010-11.
3.13 Gross Current Asset- Gross current fixed assets comprises Stores & Spares,
Debtors, Cash and bank balances, receivable from Government, loan &
advances .In the below paragraph each element of current assets are explained.
(a) Stores & spares- Stores & spares comprises stores & spares in stores for
managing day to day operation and stores at site and stores in transit .At
the end of FY 2008-09 the balance of Stores & Spares was
Rs.175.37Crore. At the end of FY2009-10 and FY2010-11 the balance
of Stores & Spares is projected to be Rs.139.70 Crores and Rs.206.88
Crore respectively.
(b) Sundry debtors – The projection for the sundry debtors is made taking
into consideration the collection efficiency of 100% and adjusting the
write off provision of 20% of the outstanding debt which are older than
more than 3 years
(c) Cash and bank balance –At the end of FY 2008-09 cash and bank
balance was Rs.222.90 Crore, which is projected to increase to
Rs.264.96 Crore by the end of FY 2010-11.
(d) Loan & Advances – Loan and advances mainly constitutes the loans
given to employees. The growth in loan and advances are projected after
considering the growth in the establishment cost and the number of
employees.

(e) Other current Assets – Other current assets consists of Fuel surcharge
adjustment accounts, receivable from GPF trust of HVPNL and other
deposit. Other current assets which were Rs.751.94 Crore at the end of
FY 2008-09 are projected to increase to Rs.998.79 Crores by the end of
FY 2010-11. The growth in other current assets is related to the
projected growth in the total turnover of the Nigam.
(f) Current liability and payables – Current liability mainly constitutes

payable on account of power purchase cost, wheeling charges and other
payable. Apart from cost related to power purchase other main elements
of current liabilities are deposit and retention from suppliers, municipals
taxes, deposits for electrification from consumers and liability for
pension fund of HVPN. At the end of FY08-09 the current liability of
the Nigam was Rs.1644.27 Crore and projected amount for the FY
2009-10 is Rs.2117.69 Crore and for FY 2010-11 is Rs.2441.09 Crore.
There is expected growth of 50% in current liability in FY 10-11 over
FY08-09.
(g) Provision for bad & doubtful debts: It is submitted that the figure of
Gross Debtors is quite high and there is a need to identify and write off
the un-recovered amount. In this respect, Nigam is planning to initiate
an action to identify and write off the un-recovered amount, for which
the possibility of recovery is absent. Therefore, Nigam is proposing to
create a provision of 20% on the debtors which are older than 3 years on
31.03.2009 amounting to Rs.100 Crores.
(h) Net current assets - Net current asset is the net of Gross current assets and
current liabilities. It is an indicator of the financial health of the
organization. The current assets at the end of FY 2008-09 are Rs.616.92
Crore and expected current assets in ensuing year FY 2010-11 is
Rs.41.89 Crore only.
(i) The table below summarizes the position of net current assets of the
Nigam:
Sl.No. Particulars PY CY EY
A Current Assets:
1 Stores and spares 175.37 139.70 206.92
2 Sundry Debtors 1055.11 1055.11 955.02
3 Cash and Bank Balances 222.90 208.95 264.96
4 Loans and Advances 54.93 56.76 56.35
5 Other Current Assets 751.94 787.66 998.79
6 Receivable From GOH 0.94 0.94 0.94
Total current assets 2261.20 2249.13 2482.98
B Current Liabilities and Provisions 1644.28 2117.69 2441.09
Current Liabilities:
Sub-total
Provisions:
Sub-total 1644.28 2117.69 2441.09

Total current liabilities and provisions
C NET CURRENT ASSETS (= A - B) 616.92 131.44 41.89

Projection for Energy Input
3.14 Haryana, as most of the other States in India, is operating under energy deficit
scenario i.e. the demand exceeds supply of power; therefore the energy for
retail supply depends on the availability of the power in the State.
3.15 It is pertinent to mention that during the FY 2009-10, the power is purchased by
the distribution companies through Haryana Power Purchase Cost (HPPC). To
estimate the energy requirement for the calculation of Annual Revenue
Requirement (ARR) for FY 2010-11, Nigam has considered the available
energy with HPPC (which after deducting the inter and intra state transmission
losses) and share of DHBVN in the total available energy, rather than
forecasting the energy requirement as per the projected demand in the various
categories for retail supply. The detail of total available energy is discussed in
the later part of the document.
Projection for Technical & Distribution Losses (T&D Losses)
3.16 The T & D losses are calculated by deducting the unit’s sales from the energy
input in the system.
(T&D Losses = Energy Input – Unit Sales)
3.17 As mentioned above, as the power is purchased by the distribution companies

through Haryana Power Purchase Cost (HPPC), hence the transmission losses
are also required to be accounted for in the books of accounts of the distribution
companies. In continuation of above, it may also be noted that the power
purchase units provided by the HPPC is after adjusting the transmission losses
(both inter and intra state transmission losses). Accordingly the losses discussed
hereunder in this section do not include transmission losses.
3.18 The table below indicates the continuous improvement in distribution loss level.
The concerted efforts by Nigam have resulted into gradual decrease in
distribution losses.
Financial year T&D losses
2002-03 35.02%
2003-04 33.34%
2004-05 32.72%
2005-06 30.90%
2006-07 29.65%
2007-08 27.54%
2008-09 25.19%
3.19 The target for AT&C loss for the subsequent years are shown in the table given
below:

Particulars FY 2008-09 FY 2008-09 FY 2009-10
( Audited) (Projection) (Projection)
T&D losses 25.19% 24.00% 23.00%
Projection for Units Sold
3.20 As submitted, the amount of input energy is limited in the State and the energy
available for retail supply is based on the energy input provided by the HPPC.
In this context it is submitted that the projection for the total energy available
for sale is intrinsically based on the total energy provided by the HPPC.
3.21 The share of DHBVN in the total energy provided by HPPC has been considered
as the base figure for the projection of energy available for sale. The normative
intrastate and interstate transmission losses and the projected distribution losses
have been reduced from the energy available from HPPC to arrive at the energy
projected for sale as detailed in DS-7.
Methodology adopted for projections
3.22 It has been observed in the past that the increase in number of consumers,
connected load and units sold is not commensurate with each other. This is due
to many socioeconomic conditions and availability/shortage of power.
3.23 For example, although as a result of numerous electrification programs that have
been launched by the Central and State Government, the connected load and
number of consumers in particular consumer category has increased, but the
percentage increase in the units sold in that particular category is not
commensurate with increase in number of consumers and connected load.
3.24 Hence, in order to correlate the growth in number of consumers, connected load
and units sold, the Nigam has projected the following individual variables:
(a) Category-wise number of consumers;
(b) Connected load per consumer (equal to connected load of a category

divided by the number of consumers in that category).
(c) Units sold per KW (equal to the units sold in a category divided by the
connected load of that category).
3.25 The final projection for category wise sales for the current year and ensuing year
has been made by multiplying the above three projected figures, as elucidated
in the equation below:
Projected Units sold = (Projected number of consumers)*(Projected connected

load per consumer)*(Projected Units sold per KW)

3.26 The Nigam has calculated the CAGR of all the above mentioned quantities and
has chosen appropriate CAGR as has been explained in the coming pages.
3.27 CAGR of three or four years has mainly been considered to capture the time factor
changes in the power supply scenario in Haryana. The spurt in economic
growth, industrialization and consequent increase in per-capita income has led
to considerable growth in electricity demand in the State.
3.28 The individual growth rates assumed for number of consumers has been provided
in tables below:
Consumer Category Assumed YoY Growth 2009-10 2010-11

Domestic 3.58% (4 year CAGR) of 1737747 1827585
normal growth and addition of
125000 consumers in RGGVY
Non Domestic 4.27% (4 year CAGR) 200868 209454
HT Industrial 9.55% (3 year CAGR) 4769 5224
LT 3.64% (4 year CAGR) 40462 41935
Agriculture- Metered 13.05% (3 year CAGR) 122959 139006
Agriculture-Un Metered -1.08% (3 year CAGR) 84216 83307
Horticulture 5% 176 185
Lift Irrigation 1.87% (4 year CAGR) 200 204
Bulk Supply 4.54% (3 year CAGR) 436 456
Railway Traction 0.00% (4 year CAGR) 1 1
Street Light 2.35% (4 year CAGR) 530 541
Metro NA 1 1
PWW 10.24% (4 year CAGR) 8473 9341
Total 2200838 2317240
3.29 Similarly, the basis of projection of connected load per consumer and the final
calculated category wise connected load based on projected number of
consumers and the projected connected load per consumer is tabulated below:
Consumer Category CAGR Chosen for projecting connected 2009-10 2010-11

load per consumer
Domestic 5.50% (3 Year CAGR for connected load 2255984 2466025
per consumer) nominal growth and addition
of 6570 kW due to RGGVY
Non Domestic 13.67% 4 Year CAGR for connected load 545687 646796
per consumer)
HT Industrial 0.44% 4 Year CAGR for connected load per 1983911 2182873
consumer)
LT 1.16% 4 Year CAGR for connected load per 700975 734906
consumer)
Agriculture- Metered 6.12% 3 Year CAGR for connected load per 1002719 1202953
consumer)
Agriculture-Un Metered 5.18% 3 Year CAGR for connected load per 802089 834523
consumer)
Horticulture 5% (nominal growth) 1205 1329
-2.41% 4 Year CAGR for connected load 85515 85140

Lift Irrigation per consumer)
Bulk Supply -4.52% 3 Year CAGR for connected load 182324 182048
per consumer)
Railway Traction 0.00% 50000 50000
Street Light 0.89% 4 Year CAGR for connected load per 6577 6768
consumer)
Metro 0.00% 10000 40000
PWW 0.75% 4 Year CAGR for connected load per 116497 127835
consumer)
Total 7743484 8561194
3.30 The basis of projection of consumption per connected load is tabulated below:
Consumer Category CAGR 2009-10 2010-11

Domestic 2.35% (3 year CAGR) 0.010 0.010
Non Domestic -1.72% (4 year CAGR) 0.015 0.014
HT Industrial 3.58% (4 year CAGR) 0.015 0.016
LT 0.31% (3 year CAGR) 0.008 0.008
Agriculture- Metered Calculated based on 5.54 of 0.014 0.013
average daily running hrs.
Agriculture-Un Metered Calculated based on 5.54 of 0.016 0.014
average daily running hrs.
Horticulture 5% (nominal growth) 0.019 0.020
Lift Irrigation 7.17% (4 year CAGR) 0.018 0.019
Bulk Supply 20.52% (4 year CAGR) 0.033 0.039
Railway Traction 5% (nominal growth) 0.028 0.030
Street Light 3.01% (4 year CAGR) 0.044 0.045
Metro 0% 0.000 0.000
PWW -0.70% (4 year CAGR) 0.023 0.022
3.31 After projecting the units sold per kW of connected load, the estimated category
wise sales are calculated by multiplying projected figures of connected load and
consumption per connected load for each category of consumer. But this
calculation is basically the estimated sales based on the past trend of category
wise sales and does not take care of the total units available for sale in FY
2009-10 (based on availability from source).
3.32 The difference of total sales calculated from the above method and the total
available units for sale (14579 MUs) came as 1460 MUs. These excess units are
proposed to be distributed among all the categories of consumers in ratio of the
sales figure calculated earlier, except agriculture, railway, metro and street
light.
3.33 The final figures of category wise units sold calculated as per the above method is
tabulated here:
Consumer Category 2009-10 2010-11

Domestic 2334.15 2961.17
Non Domestic 823.54 1081.42
HT Industrial 3162.23 4062.45
LT 608.61 721.49
Agriculture- Metered 2027.60 2432.49
Agriculture-Un Metered 1621.90 1687.49
Horticulture 2.39 3.11
Lift Irrigation 160.66 193.25
Bulk Supply 618.27 838.70
Railway Traction 141.79 148.88
Street Light 28.93 30.66
Metro 21.02 84.10
PWW 271.43 333.41
Total 11822.51 14578.63
3.34 The table given below provides the year on year category-wise growth observed in
the last 3 years and that expected in the current year and ensuing year.
Summary-Energy Growth 2006-07 2007-08 2008-09 2009-10 2010-11

Domestic 6.45% 13.26% 16.01% 13.56% 26.86%
Non Domestic 21.31% 20.86% 8.15% 18.14% 31.31%
HT Industrial 21.47% 14.27% 10.09% 12.86% 28.47%
LT 3.70% 1.02% 11.13% 6.97% 18.55%
Agriculture- Metered 11.55% 16.08% 13.07% 52.93% 19.97%
Agriculture-Un Metered -6.28% -5.22% -6.83% 21.08% 4.04%
Lift Irrigation -3.00% 12.63% -4.45% 9.40% 20.28%
Bulk Supply 12.23% 26.29% 26.47% 21.86% 35.65%
Railway Traction 6.12% 4.67% -0.05% 5.00% 5.00%
Street Light 17.94% 5.96% -9.85% 4.92% 6.00%
PWW 11.42% 4.41% 9.68% 7.58% 22.84%
Total 8.88% 10.29% 9.14% 19.90% 23.31%
3.35 The consumption in respect of domestic category has been growing at a

considerable rate in the past couple of years. In addition, the projected growth
in 2090-10 and FY 2010-11 is also assumed to be increase further from 16.01%
in FY 2008-09 to 13.56% in FY 2009-10 and 26.86% in FY 2010-11.
3.36 The growth in domestic category is because of a number of factors which are:
a) The segregation of feeders is expected to be completed in the current financial

year. It is also assumed that since there is surplus availability in power
supply after nominal increase in sales calculated based on past trend of
sales, the extra surplus will be provided to the rural domestic category on
the segregated feeders.

b) The addition in number of domestic consumers from BPL families because of
Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY) which is running in
the current financial year and would be spilled over to the ensuing year.
3.37 In the Non-domestic, HT industrial, LT Industrial and Public Water Works

categories, the growth in sales can be attributed to the increased availability and
apportionment of the surplus units as mentioned in Clause 3.32 to these
categories in ratio of their share of consumption.
3.38 The Bulk category has registered a robust growth throughout the period that we
have considered for making the projections. Hence considering four year
CAGR, an overall growth of 35.65% in energy consumption is assumed in the
ensuing financial year.
3.39 In railway traction, the growth has been assumed to be less and the consumption is
considered to be almost stagnant except nominal increase of 5%. This is
because the connected load of railways is expected to be constant and also the
hours of supply given in the past is also not expected to increase by more than
5% in spite of increase in availability of power.
3.40 In case of street lighting, although the past trend has seen considerable increase in
terms of percentage growth, but still we have projected a modest growth as
there are many DSM initiatives and power saving schemes are slated to be
launched in street lighting sector. Also in the last few years most of the
residential colonies have already been provided with street lighting. Hence not
much increment in respect of consumption is expected in the coming years.
3.41 In respect of agriculture consumption, it is may also be noted that, the projection
for units sold in respect of agriculture categories is based on the connected load
and average supplied hours per day. The average running hours has been
considered for the estimation of consumption based on the figures approved by
the Commission in the past order of FY 2008-09.
3.42 The Nigam has considered the same running hours as were allowed by HERC as
per its ARR order of DHBVN for FY 2008-09. The average supplied hours per
day for FY 2009-10 and FY 2010-11 are shown in the table given below:
Average Supplied Hours FY2009-10 FY2010-11

Metered –AG 5.54 5.54
Un Metered- AG 5.54 5.54
3.43 In addition to above it may also be noted that, although no new connection has
been released in un-metered category, but still as a result of the various
voluntary disclosure schemes launched by the Nigam, the un-metered
consumers are coming ahead for up gradation of load. As a result, the
connected load in the agriculture un-metered category is continuously
increasing.

3.44 Since the running hours have been assumed the same for both 2009-10 and 2010-
11, hence due to the increasing load the total consumption in this category is
expected to increase.
3.45 The load factors observed in the past and also the projected load determined on
the basis of the abovementioned factors is tabulated below.
Category 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Domestic 10.43% 10.15% 10.74% 11.18% 11.81% 13.71%
Non Domestic 18.50% 18.95% 19.29% 16.93% 17.23% 19.09%
HT Industrial 15.10% 16.51% 16.99% 16.97% 18.20% 21.24%
LT 9.46% 9.23% 8.68% 9.54% 9.91% 11.21%
Agriculture- Metered 20.12% 18.78% 17.96% 17.06% 23.08% 23.08%
Agriculture-Un 27.14% 23.86% 21.97% 19.94% 23.08% 23.08%
Metered
Horticulture 20.78% 22.59% 26.74%
Lift Irrigation 17.84% 17.02% 19.13% 19.33% 21.45% 25.91%
Bulk Supply 17.21% 15.34% 17.60% 31.02% 38.71% 52.59%
Railway Traction 61.71% 65.49% 68.55% 30.83% 32.37% 33.99%
Street Light 47.35% 52.26% 54.67% 48.74% 50.21% 51.72%
PWW 27.97% 28.28% 26.94% 25.87% 26.60% 29.77%
3.46 It can be observed from the above table that the load factor for all the categories is
showing an increasing trend in the past 3 years because the availability of
power has increased and expected to increase further in the ensuing years which
ensures less power cuts and enhanced average hours of supply.
Revenue from Sale of Power at existing tariff
3.47 The revenue from sale of power has been projected on the basis of projected sales
determined above. For domestic and bulk supply categories there are sub
categories/slabs and the tariffs are different for each sub category/slab.
Therefore Nigam has considered the actual assessment per unit as per audited
accounts of the FY 2008-09.
Category Units sold Assessment Revenue Units sold Revenue

FY 2000-10 per unit FY 2009-10 FY 2010-11 FY 2010-11
Domestic 2334 3.29 767.93 2961 974.23
Non Domestic 824 4.19 345.06 1081 453.12
HT Industrial 3162 4.09 1293.35 4062 1661.54
LT 609 4.28 260.49 721 308.80
Agriculture- Metered 2028 0.25 50.69 2432 60.81
Agriculture-Un Metered 1622 35/BHP/Month 44.16 1687 46.07
Horticulture 2 0.25 0.06 3 0.08
Lift Irrigation 161 4.00 64.26 193 77.30
Bulk Supply 618 4.04 249.78 839 338.84
Railway Traction 142 4.04 57.28 149 60.15
Street Light 29 4.15 12.00 31 12.73

Metro 21 3.97 8.35 84 33.39
PWW 271 4.00 108.57 333 133.36
Total 11823 3261.99 14579 4160.40
3.48 The Nigam requests Honorable Commission to allow the revenue from Sale of
Power of Rs.4160.40 Crore for FY 2010-11.
Power purchase
Background
3.49 Prior to the implementation of the provision of section 39(1) of the Electricity Act
2003, HVPNL was designated as “Single Buyer” (apart from being a
“Transmission Licensee”) and was undertaking activities of bulk power
procurement from various sources (including HPGCL, interstate generating
stations, joint sector generating stations, captive power plants, independent
power producers, short-term trades, UI trades etc.) and bulk power sale to two
distribution companies in Haryana (viz. UHBVN and DHBVN).
3.50 In June 2005, in order to implement provision of section 39(1) of the Electricity
Act 2003, Government of Haryana (GoH) bifurcated transmission and power
trading functions from HVPNL and handed over the power trading function to
HPGCL. Effectively, HPGCL has been looking after state-owned generation
and power trading business for the state as a whole.
3.51 In continuation of above and in exercise of powers conferred under section 131 of
the Electricity Act 2003, the Government of Haryana (GoH) has transferred the
rights relating to procurement of electricity/ UI drawls/ dispatches or trading of
electricity from Haryana Power Generation Corporation Limited (HPGCL-
Transferor Company) to Uttar Haryana Bijli Vitran Nigam Limited (UHBVN)
and Dakshin Haryana Bijli Vitran Nigam Limited (DHBVN) with effect from
1.04.2008, with the functional arrangements becoming operational w.e.f
15.04.2008.
3.52 In exercise of the above, the Haryana Power Purchase Centre has been set up to
manage the bulk power purchase and supply functions of the two companies.
All the power purchase from within and outside Haryana is being managed by
the HPPC.
Power Purchase (MU)

3.53 The HPPC procures power for the two distribution companies from the central
generating stations and other external sources apart from the power made
available by the HPGCL from the state generating stations. The shortage in
supply due to excess demand is met through the UI, power trading corporation
and other trading sources.
3.54 The major external sources from which power is procured by HPPC for the two
distribution companies are:
(a) NTPC

(b) NHPC
(c) NPC
(d) Co-generation
(e) Short-term power arrangements- PTC, NVVNL, ADANI, TATA, REL etc
Allocation of Share to Haryana

3.55 The total allocated share available for the Northern region from each of the
stations is 85 %. The state of Haryana receives fixed allocated share from each
of the external sources to meet its energy requirements. Moreover, Haryana also
receives a quantum of electricity from the unallocated share of 15% at different
intervals during a year.
Broad Approach
3.56 The petitioner has considered the actual power purchase bills for the past period
(2003-2009) for quantum and cost of power purchase.
3.57 The estimated monthly power availability in FY2009-10 and FY 2010-11from

various firm sources has been made on the basis of
• Average share (including unallocated share) of UHBVNL in various

generating stations in last 4 years
• Past availability trends for thermal stations
• Design energy for Hydro Power Stations
• For new thermal stations, availability of 80% in case of HPGCL plants and
85% in case of central sector plants.
3.58 The cost estimates for the FY2009-10 and FY 2010-11 have been made on the
basis of relevant tariff orders, recent bills, existing arrangements, notifications,
etc for various individual sources. For all central generating stations, the
petitioner has considered the annual fixed cost of FY2008-09 as annual fixed
cost of FY2009-10, FY2010-11 and has not considered impact of the new
regulations issued by the CERC for generation tariff for period 1st April 2009
onwards as CERC has not revised the annual fixed cost as per the new
regulations for these stations. The petitioner prays that it should be allowed to
recover any increase in annual fixed cost due to the new regulation/tariff order
of CERC in future years.
3.59 Losses in the Northern Region’s PGCIL system and PTCUL transmission system
have been considered while estimating availability of power for UHBVNL as
discussed in detail in paragraph 7.47 and 7.48 below.
3.60 The petitioner has also estimated short term power as 5% of the total long term
power for meeting the peaking demand of the system.

3.61 There are also some new projects which have been projected as per the
commencement date of these stations. The details of these stations are given
below.
Station Capacity Haryana Haryana Projected Projected CoD

MW % Share Generation Generation
Share in FY09-10 in FY10-11
Commissioned in FY10
RAPP U-5 220 12.50 5.68% 14.86 59.46 Dec-09
RAPP U-6 220 12.50 5.68% 59.46 Mar-10
Pathadi TPS Ph-I (Lanco - Amarkantak) 300 300.00 100.00% 340.65 2043.93 Jan-10
Sewa II U-1 40 3.00 7.50% 1.95 11.71 Jan-10
Sewa II U-2 40 3.00 7.50% 0.98 11.71 Feb-10
Sewa II U-3 40 3.00 7.50% 0.00 11.71 Mar-10
Budhil U-1, U-2, Lanco thru PTC 70 70.00 100.00% 181.75 Jul-10
Jun-10,
Jul-10 &
Chamera III 231 16.00 6.93% 41.54 Aug-10
Uri II 240 13.00 5.42% 4.22 Feb-11
Apr-10,
Mejia TPS Ph II 1000 100.00 10.00% 539.37 Jul-10
Aug-10,
Sept-10,
Oct-10,
Parbati III 520 34.00 6.54% 60.69 Nov-10
Jan -
10,Aug-
10, Oct-10
Koteshwar,THDC 400 20.00 5.00% 9.76 43.90 & Dec-10
Oct-10,
Pragati CCGT - III, Bawana 1500 137.00 9.13% 247.37 Feb-11
Total 368.20 3316.82
3.62 On the basis of the above mentioned projections from external and internal
sources of Haryana, the energy to be purchased by Haryana has been projected
at 368.20 MU for FY2009-10 and for FY2010-11 it is projected at 3316.82 MU.
Power Purchase cost

3.63 The power purchase cost for FY 2009-10 and FY 2010-11 has been projected
based up on the FY 2008-09 rates from each of these stations. The petitioner
has considered increase in variable cost for the thermal generating station @
6%, 9% for FY 2009-10 and FY 2010-11 respectively. Higher increase in FY
2010-11 has been assumed due to the recent proposal of Coal India of
increasing coal charges from its mines. The petitioner has also assumed
increase in variable cost of nuclear generation plants @ 1% per for FY 2009-10
and FY 2010-11.

3.64 For the external plants, the petitioner has considered fixed cost for FY 2009-10
and FY 2011 at par with fixed cost for FY 2008-09 approved by the CERC in
its various orders
3.65 For HPGCL stations, the petitioner has considered cost of power purchase @
3.02/kWh for all existing and IGSTPP, Jhajjar as indicated by HPGCL. For
RCTPP Hisar, the petitioner has considered cost of power purchase @ Rs
3.39/kWh as indicated by HPGCL. The cost for short-term/UI purchase has
been considered @ Rs 5/kWh for FY 2010-11 and on the basis of the average
cost for first half of FY 2009-10, and @ Rs 5/kWh for remaining half year. For
the new thermal projects, per unit cost has been assumed at the same level as
Rihand II thermal station. For the new hydro power the cost of Chamera II
hydro Station has been considered. The petitioner prays that in case of any
variance in the cost of the new plants, the petitioner should be allowed to
recover the additional cost. The total power purchase cost for FY 2008-09 for
Haryana from external and internal sources has been assessed as Rs. 10954.21
Cr.

Previous Year Current Year Ensuing Year
Actual (FY2008-09) Estimate (FY2009-10) Projection (FY2010-11)
Source Energy Rs Cr Paise/ Energy Rs Cr Paise/ Energy Rs Cr Paise/
Units Unit Units Unit Units Unit
(MU) (MU) (MU)
NTPC
Plants
Singrauli
1848.89 249.45 135 1806.06 273.50 151 1806.06 291.52 161
TPS
Rihand
691.82 259.79 376 665.18 154.85 233 665.18 163.75 246
STPS
Rihand II
685.82 666.20 152.53 229 666.20 161.88 243
STPS
Anta GPP 181.24 43.42 240 221.67 57.66 260 221.67 61.54 278
Auraiya
254.79 70.14 275 312.68 84.83 271 312.68 90.40 289
GPP
Dadri GPP 266.19 76.75 288 320.90 98.49 307 320.90 104.90 327
FGUTPS I
TPS 105.27 111.40 224 110.11 29.75 61 110.11 31.45 64
(Unchahar)
FGUTPS II
TPS 264.58 260.70 61.32 260.70 65.41
(Unchahar)
FGUTPS III
TPS 127.67 119.22 32.71 119.22 34.58
(Unchahar)
Faridabad
2299.72 676.17 294 2701.55 774.89 287 2701.55 825.24 305
Gas
Farakka 146.96 31.00 211 99.27 20.59 207 99.27 21.84 220
Kahalgaon I 270.35 94.46 349 217.47 57.80 266 217.47 61.80 284
Kahalgaon
153.66 316.81 82.06 259 316.81 87.89 277
II
NTPC Sub
7296.96 1612.57 221 7817.82 1880.97 241 7817.82 2002.20 256
Total
NHPC
Plants
Bairasiul
203.74 19.34 95 234.13 18.49 79 234.13 18.49 79
HEP
Salal HEP 451.31 34.22 76 452.79 80.35 177 452.79 80.35 177
Tanakpur
23.21 3.01 130 28.36 3.71 131 28.36 3.71 131
HEP
Chamera
338.00 49.39 146 256.72 39.81 155 256.72 39.81 155
HEP
URI HEP 162.81 22.29 137 136.89 19.91 145 136.89 19.91 145
Chamera-II
121.19 36.90 304 137.95 35.90 260 137.95 35.90 260
HEP
Dhauliganga
92.46 18.17 197 92.94 19.01 205 92.94 19.01 205
HEP
Dhulhasti 176.57 52.28 296 136.02 19.37 142 136.02 19.37 142

(MU) (MU) (MU)
HEP
NHPC Sub
1569.28 235.61 150 1475.81 236.55 160 1475.81 236.55 160
Total
Other
Hydro
SJVNL/
Nathpa 394.65 109.05 276 415.07 97.35 235 415.07 97.35 235
Jhakri
Tehri HEP 188.45 85.90 456 165.34 81.07 490 165.34 81.07 490
Other
Hydro Sub 583.10 194.95 334 580.41 178.42 307 580.41 178.42 307
Total
NPCIL
Plants
NAPP 51.78 9.93 192 71.43 21.03 294 64.58 19.84 307
RAPP-Unit
236.40 65.23 276 169.89 57.59 339 182.02 61.58 338
3
RAPP-Unit
4
Nuclear
288.17 75.16 261 241.32 78.63 326 246.60 81.42 330
Sub Total
BBMB 3138.97 81.61 26 3288.83 89.79 27 3288.83 94.27 29
Other
IPGCL
250.13 77.94 312 276.18 94.08 341 0.00 0.00 #DIV/0!
Share
Tala HEP
57.28 10.33 180 57.64 10.59 184 57.64 10.59 184
(Bhutan)
PTC (J&K)
(Baglihar 0.00 0.00
HEP)
Other Sub
307.41 88.27 287 333.82 104.67 314 57.64 10.59 184
Total
Other
Total Long
Term
13183.89 2288.18 174 13738.02 2569.02 187 13467.12 2603.45 193
Power
Purchase
New
368.20 87.64 238 3316.82 843.25 254
Projects
Short Term
Power 1460.47 925.25 634 4000.00 2891.73 723 0.00 0.00 #DIV/0!
Purchase
PGCIL-UI 1403.84 728.11 519
HVPNL-UI 32.01 21.14 660

(MU) (MU) (MU)
BILT -0.21 0.29 -1367
UI Sub
1435.63 749.55 522
Total
Total
28526.29 7473.82 262 30897.88 9411.47 305 38549.81 10276.23 267
Purchase
Transmission losses
3.66 The Inter-state losses have been considered as 4.23% FY 2009-10 and FY
2010-11. Intra-state transmission losses for FY 2009-10 and FY 2010-11
have been considered at 2.10%, which is as per the HERC approved losses
for FY 2009-10.
Wheeling Charges & SLDC Charges

3.67 The Wheeling and SLDC charges for FY 2009-10 and FY 2010-11 have been
considered as per the order of the of the Hon’ble Commission for FY 2009-
10.
3.68 The petitioner has assumed PGCIL charges for FY 2009-10 and FY 2010-11
based on the actual charges for FY 2008-09 after considering 5% per annum
increase.
Bulk Supply Tariff-DHBVN

3.69 On the basis of the above, the Bulk supply tariff and power purchase tariff for
Haryana is tabulated below:
S No. Particulars FY 09-10 FY 2010-11

1 Gross Energy Procured from out of state sources (MU) 1 19826 18663
2 Inter state transmission loss % 2 4.23% 4.23%
3 Inter state transmission loss (MU) 3=1*2 839 789
4 Net Energy available from out of state sources (MU) 4=1-3 18988 17874
5 Add energy generated within the State (MU) 5 12792 20805
6 Net Energy available for use in Haryana 6=4+5 31779 38679
7 Intra - state transmission loss (%) 7 2.1% 2.1%
8 Intra - state transmission loss (MU) 8=6*7 667 812
9 Energy available for sale to distribution licensees 9=6-8 31112 37867
10 Total PP Cost (Rs. Million) 10 97740 109542
11 Average BST UH +DH 11=10/9 3.142 2.893

3.70 On the basis of the above the total power purchase and transmission charges
and cost for DHBVN is shown below (50% share of PP cost and units for
DHBVN)
S No. Particulars FY 2008-09 FY 2009-10

1 Power Purchase Cost (Rs Mn) 48812 54771
2 Inter-State Transmission Charges (Rs Mn) 915 961
3 Intra - State Transmission Charges (Rs Mn) 2864 2864
4 SLDC Charges (Rs Mn) 39 39
5 Total Bulk Purchase & Transmission charges (Rs Mn) 52631 58635
6 Energy available for sale to DHBVN (50% of Haryana) 15556 18933
7 Power Purchase Cost per unit (Rs/kWh) 3.138 2.893
8 Transmission Charges per unit (Rs/kWh) 0.243 0.202
9 SLDC Charges per unit (Rs/kWh) 0.003 0.002
10 BST (Rs/kWh) 3.383 3.097
Interest & Finance Charges
3.71 Interest expenses represent interest on loans taken to finance the capital
investment programs, and to support working capital. For loans taken for
capital expenditure the existing interest rates of the institutions have been
used to calculate the interest cost.
3.72 With respect to existing loans, the details of interest on existing loans are
based on the actual workings. With respect to new loans, interest charged is
based on current market conditions. Interest on other additional loans that
DHBVN would need to borrow to meet its working capital requirement has
been taken as the existing interest rates of working capital loans tied up in
the present year FY 2008-09, i.e. 9.00%.
3.73 Interest expenses incurred for the working capital requirement includes the
interest expense incurred on the already tied up loans as given in table
below. The detailed schedule of the loans has been provided in the specified
formats DF-9 and DF-9(a).
3.74 As per Regulation19 of the Tariff Regulations, 2008 the licensee shall be
allowed the working capital equivalent to one months of its working capital.
However, the actual working capital requirement of the Nigam is much
higher as compared to what is allowed by the Hon’ble Commission.
3.75 It is pertinent to mention that the Nigam is facing additional financial burden
on account of the disallowance of complete working capital requirements by
the Commission, due to which the Nigam has to bear the interest cost of the
short-term loans borrowed from different financial institutions. It is
important to note that the disallowance on account of interest in working
capital is leading to increase in the financial losses.

3.76 On account of the above Nigam would also like to draw the attention of the
Hon’ble Commission on the specific clauses of the National Tariff Policy:
(a) Saction 8: Making the distribution segment of the industry efficient

and solvent is the key to success of power sector reforms and
provision of services of specified standards. Therefore, the
Regulatory Commissions need to strike the right balance between
the requirements of the commercial viability of distribution licensees
and consumer interests. Loss making utilities need to be transformed
into profitable ventures which can raise necessary resources from
the capital markets to provide services of international standards to
enable India to achieve its full growth potential.
(b) Section 5(f): In cases where operations have been much below the
norms for many previous years, the SERCs may fix relaxed norms
suitably and draw a transition path over the time for achieving the
norms notified.
3.77 The Nigam further submits that the other Regulatory Commissions across
India are following a more practical approach in computing the Working
Capital requirements. The following are the regulations for Working
requirement regulations computed by some of the Regulatory Commissions
across India:
Himachal Pradesh Electricity Regulatory Commission

3.78 As per HPERC, the working capital requirement shall be worked out, based
upon a lead-lag study and such working capital requirement should move
towards further efficiency levels for the subsequent years.
Kerala State Electricity Regulatory Commission

3.79 The Working Capital may reflect current level of collection efficiencies,
available security deposit, billing cycles, requirement of spares, power
purchase cost etc. The licensee should submit the details of lead-lag study
for arriving at optimum working capital requirements and moving towards
further efficiency levels for the subsequent years.
Tamil Nadu State Electricity Regulatory Commission

3.80 The Commission may conduct lead-lag studies for determination of Working
Capital requirement for various types of Generating Stations /Transmission
system / distribution system to arrive at a formulaic dispensation to
accommodate improvement on norms mutually agreed to between the
generators and purchasers. Till such a formula is evolved, the norms for
Working Capital for distribution business shall be as mentioned below:
(a) Operation and Maintenance expenses for one month
(b) Maintenance spares for two months based on annual requirement

considered at 1% of the gross fixed asset at the beginning of the
year.

(c) Receivable equivalent to sixty days consumption charges.
Chhattisgarh State Electricity Regulatory Commission

3.81 The Working capital shall consist of:
(a) Operation and maintenance expenses for one month.
(b) Maintenance spares for 2 months based on annual requirement

considered at 1% of the gross-fixed assets at the beginning of the
year.
(c) Receivables equivalent to 60 days average billing of consumers.
(d) Receivables equivalent to 60 days of wheeling charges from open

access customers.
3.82 The Nigam would request the Commission to conduct the lead lag study for
the computation of working capital requirements and till such time consider
the working capital requirements as per the projection of the Nigam, while
taking reference from the basis of the formula suggested by Chhattisgarh
and Tamil Nadu Commissions.
3.83 Based on the grounds mentioned above and also in view of the fact that power
procurement has been transferred to the Discoms with corresponding
transfer of Trading business loans of Rs. 414.22 Crore as on 31.3.2009 and
there is generally the time lag of more than a year in recovering of FSA
amount, the Nigam submits to allow the working capital as per the
projections.
3.84 Total interest expense is expected to be around Rs 444.02 Crores for FY 2010-
11. This amount also includes the interest on consumer security calculated
at bank rate which is 6%, at present.
3.85 The table below shows the interest costs for both short term and long term
loans.
Particulars Previous Year Current Year Ensuing Year

In Rs Crores Actual Projected Projected
AI Interest and Finance Charges on
Long Term Loans / Credits from
the FIs/ banks/ organisations
approved by the State
Government
1 PMGY 0.25 0.14 0.13
2 APDRP 5.60 5.30 4.91
3 NABARD 0.58 0.38 0.21
4 REC 51.01 75.49 131.40
5 REC (IBRD loan refinanced) 1.74 1.59 1.41
6 REC- STL 6.07 2.40 0.00
7 PFC 1.93 1.85 1.63

8 NCR PB 2.07 9.44 13.69
9 Bank of Rajasthan, Hsr. 9.96 7.99 5.19
10 PFCL(R-APDRP) 0.04 2.90 6.94
11 IBRD(EAP) 0.33 5.56
12 REC(RGGVY) 0.10 0.59 0.98
Total of I 79.34 108.38 172.05
II Interest on Working Capital Loans 155.52 221.54 378.88
Or Short Term Loans
Total of A : I + II 234.86 329.92 550.93
B Other Interest & Finance Charges
1 Cost of raising Finance & Bank
Charges etc.
2 Interest on Security Deposit 9.97 29.41 34.21
3 Penal Interest Charges
4 Lease Rentals
5 Penalty charges for delayed
payment for power purchase
Total of B 9.965 29.41 34.21
C Grand Total Of Interest & Finance 244.82 359.33 585.14
Charges: A + B
D Less: Interest & Finance Charges 65.08 88.90 141.12
Chargeble to Capital Account
E Net Total Of Interest & Finance 179.74 270.43 444.02
Charges : For Revenue Account:
C-D
Depreciation
3.86 As per Tariff Regulations, 2008 the provision for depreciation on new assets
i.e. assets added after 31.3.2005 needs to be provided at the rates prescribed
in the appendix to Regulations.
3.87 As such the licensee has calculated the depreciation on new assets at the rate
provided in the Tariff Regulation, 2008. However, it is not possible to
classify the projected additions in fixed assets sub-categories wise. As such,
the Nigam has considered the deprecation rate on Plant & Machinery to be
equal to the rate prescribed for Transformers i.e. 3.60% p.a.
3.88 The depreciation charged at the new rates is added to the opening balance of
the provision for depreciation. The following depreciation rates have used
as for the purpose of calculation of depreciation.
Asset Type Depreciation Rate

Land -
Buildings 1.80%
Plant & Machinery 3.60%
Vehicle 18.00%
Furniture and fixtures 6.00%

3.89 Depreciation on the assets created out of customer contributions and grants
have not been booked as expenditure in the annual revenue requirement.
3.90 Accordingly, the depreciation claim for FY 09-10 is estimated to be Rs.86.60

Crores and Rs.132.74 Crores for FY 2010-11.The detailed calculation of
depreciation is provided in DF-8 as under:

Previous Year
In Rs Crores Gross Fixed Assets Provision For Depreciation Net Fixed Assets
Sl.No Particulars At Addition Adjust- At Rate of At Addition Adjust- At At The At the
Begning During ments & End Depreciation Begning During ments & End begning End
of Year Year Deduction Of of Year Year Deduction Of of Year Of
Year Year Year
1 Land 25 0.00 0 25 0.00% 0.00 0.00 0.00 0.00 24.81 24.84

2 Building and 81 5.74 0 86 3.01% 16.76 2.43 0.00 19.19 66.89 63.87
Civil Structure
3 Plant & 1767 395.94 3 2160 7.92% 672.66 140.02 1.90 810.77 1348.90 1094.53
Machinery-
T&D
4 Vehicles 11 0.27 0 11 6.12% 8.74 0.68 0.00 9.43 1.98 2.44
5 Furniture and 9 1.59 0 10 10.22% 2.85 0.90 0.00 3.76 6.65 5.97
Fixtures
Sub-Total 1893 403.54 4 2292 701.02 144.03 1.90 843.14 1449.24 1191.66
Less: 47.02
Depreciation
on Assets
Created
out of
Consumer
Contribution
Total (1 to 10) 97.01

Current Year
Sl.No Particulars At Addition Adjust- At Rate of At Addition Adjust- At At The At
Beginning During ments & the Depreciation Beginning During ments & End beginning the
of Year Year Deduction End of Year Year Deduction Of of Year End
Of Year Of
Year Year
1 Land 25 4.33 0 29 0.00% 0 0 0 0 25 29

2 Building and 86 28.90 0 115 1.80% 19 2 0 21 67 94
Civil Structure
3 Plant & 2160 1233.99 0 3394 3.60% 811 126 0 936 1349 2457
Machinery-
T&D
4 Vehicles 11 4.83 0 16 18.00% 9 1 0 10 2 6
5 Furniture and 10 7.23 0 18 6.00% 4 1 0 5 7 13
Fixtures
Sub-Total 2292 1279.28 0 3572 843.14 129 0 973 1449 2599
Less: 43
Depreciation
on Assets
Created
out of
Consumer
Contribution
Total (1 to 10) 86.60

Ensuing Year
Ensuing Year
Sl Particulars At Addition Adjust- At Rate of At Addition Adjust- At At The At the
.N Beginning During ments & the Depreciation Beginning During ments & End beginning of End
o of Year Year Deductio End of Year Year Deductio Of Year Of
n Of n Year Year
Year
1 Land 29 4.24 0 33 0.00% 0.00 0.00 0.00 0.00 29 33

2 Building and Civil 115 28.28 0 143 1.80% 21.38 2.71 0.00 24.09 94 119
Structure
3 Plant & 3394 1207.45 0 4601 3.60% 936.30 169.95 0.00 1106.25 2457 3495
Machinery-T&D
4 Vehicles 16 4.72 0 21 18.00% 10.28 1.72 0.00 12.00 6 9
5 Furniture and 18 7.08 0 25 6.00% 4.56 1.24 0.00 5.80 13 19
Fixtures
Sub-Total 3572 1251.76 0 4823 972.51 175.62 0.00 1148.13 2599 3675.28
Less: Depreciation 43
on Assets Created
out of Consumer
Contribution
Total (1 to 10) 132.74

Operation and Maintenance (O&M) Cost
3.91 The O&M Cost comprises of three components namely
(a) Employee cost;
(b) Repair & Maintenance cost; and
(c) Administrative & General Cost.
3.92 The below table summarizes the O&M cost for audited year, current year and ensuing year.
Particulars (Rs. Crores) FY FY FY

2008-09 2009-10 2010-11
(Actual) (Proj) (Proj)
Employee costs 490.27 506.62 502.94

R & M costs 33.39 58.64 83.95
A & G costs 60.77 71.56 86.08
Total O & M Expenses 584.43 636.82 672.97
3.93 O&M Cost has increased over a period of time due to normative increase in inflation and various
other factors which are not under the direct control of the Nigam and the same are discussed
below. The Methodology adopted by DHBVN for calculating the individual Components of
O&M cost is also detailed hereunder.
Employee Cost
3.94 The employee cost is the most important constituent of the O&M costs. The Nigam has
implemented the recommendations of sixth pay commission w.e.f. from FY09-10 and the
employees of the Nigam have started drawing salaries as per new scale from April’09. Of the total
arrears of approximately Rs.117 Crore, 40% of the total arrears amounting to Rs.46.50 have been
paid during previous FY2008-09 and the balance 60% arrears amounting to Rs.69.75 Crore are
proposed to be paid during the current financial year.
3.95 During the current financial year, the Nigam is expected to add 1648 nos. of new employees. The
salary expense of these new employees has only been considered for an average period of 3
months only during the current year.
3.96 Employee cost includes the cost incurred on present employees as well as on the retired employees.
The cost of present employees includes salary, dearness allowance payable to employees and
other allowances such as Bonus, HRA, LTC, and Medical Reimbursement etc.
3.97 In the case of retired employees and those retiring during the year, the Nigam has to discharge
liabilities towards pension, gratuity and leave encashment benefits etc, as applicable. Employee
cost also includes staff welfare expenses.

3.98 The estimated employees cost is Rs.506.62 Crore for FY 2009-10 and Rs.502.94 Crore during FY
2010-11. As detailed above the salary expense of FY 2009-10 includes the 60% arrears of sixth
pay commission amounting to Rs.69.75 Crores. During FY 2008-09 the employee cost was
Rs.490.27 Crores
Particulars Audited Projection Projection

2008-09 2009-10 2010-11
Employee's Cost
Salaries 117.49 185.49 205.01
Dearness Allowance 55.19 50.08 75.85
Other Allowances & Relief 16.31 25.76 28.47
Impact of VI Pay Commission 46.50 69.75 0.00
Medical Expenses Reimbursement 3.74 4.85 6.28
Leave Travel Assistance 0.06 0.07 0.08
Payment under Workmen's Compensation Act. 0.66 0.77 0.91
Leave salary contribution. 0.00 0.00 0.00
Pension contribution (staff on deputation with 0.03 0.03 0.03
DHBVNL)
Pension, Leave, Gratuity contribution 231.99 149.16 164.08
Pension contribution of new staff 7.38 8.48 9.76
Adjustment of HRA not paid(notional) 0.17 0.17 0.17
Staff welfare expenses 3.26 3.58 3.94
Total B 482.78 498.21 494.58
Apprentice And Other Training Expenses
Payment/Contribution To PF Staff Pension And Gratuity
Terminal Benefits 9.00 11.40 14.44
Any Other Items
Total D 9.00 11.40 14.44
Bonus/Ex-gratia To Employees 0.90 1.42 1.57
Grand Total 492.69 511.03 510.60
Chargeable To Construction Works 2.42 4.41 7.66
Balance Item 'F' Appropriate For (F)-(G) 490.27 506.62 502.94
3.99 The Nigam would like to submit justifications for increase in the employee costs and draw the
attention of the Hon’ble Commission on the following issues:
(a) Salaries & Allowances: In the projection of salaries and allowances the following
assumption has considered:
(i) While projecting the employee expenses for FY 2009-10 and FY 2010-11, the new
salary structure as per sixth apy commission has been considered for the
projection of the salaries and allowances.
(ii) The impact of new recruitment plan has been estimated on the basis of the Nigam’s
recruitment plan. 1648 new employees are planned to be recruited during FY
2009-10 and it is also assumed that there will no new recruitment during FY
2010-11. The number of employees retiring during FY 2009-10 and FY 2010-11
are 462 and 479 respectively.

(iii) Nigam proposes an increase of 3% for both the current year and ensuing year in the
basic salary in accordance with the structure of sixth pay commission.
(iv) The dearness allowance has been assumed on the basis of the declared DA rates by
the State Government. For the FY 2009-10 the average DA rate is estimated to be
27% and for FY 2010-11 average DA rate is assumed to be 37%.
(v) The other allowances have been projected on the basis of the percentage of other
allowance to the basic salary as the allowances have direct link with the basic
salaries. For the purpose, the percentage reflected during last FY 2008-09 i.e.,
13.89% is considered for the projection of other allowance as it reflects the latest
trend of other allowance. Bonus is estimated on the basis of actual payout for the
years FY 2008-09.
(b) Medical expenses reimbursement and adjustment of HRA not paid have been estimated on
the basis of the average growth seen in the previous financial years
(c) Due to no visible fixed trend for leave travel concession it has been estimated by considering
the growth rate of 10%.
(d) Leave salary contribution and Payment under workmen’s compensation Act have been
estimated on the basis of the growth recorded during the previous financial year.
(e) Terminal benefit and pension contribution of new staff is estimated to increase nominally.
(f) Pension, leave and gratuity contribution has been estimated on the basis of the booking under
these heads during FY 2008-09 after excluding the one time payment amounting to Rs.119
Crores. The normal expenditure of last year is escalated by 10% for projections.
(g) Staff welfare cost is also estimated to increase by 10% over the previous years.
(h) As far as the capitalization of the establishment expenditure is concerned the same has been
estimated at a percentage higher than during the last year due to incurrence of more capital
expenditure.
Administration and General (A&G) Cost

3.100 The gross A&G costs are estimated to increase by 20% during the FY 2010-11 over the FY 2009-
10 due to normative increase in inflation and various other factors which are not under the direct
control of the Nigam. During the FY 2009-10 the growth assumed in A&G cost is 18% over the
last financial year. The component wise increase in A&G cost is given below:
3.101 The increase in rent (including lease rentals), insurance expenses, telephone, postage, telegram, &
telex charges, licensee fees are based on the last year growth as per audited account.
3.102 The legal charges, consultancy charges, other professional charges, service charges for
computerization, other material related expenditures and other expenditure are considered based
on the last year audited expenses and a nominal growth is projected for the expenditure for FY
2010-11.

3.103 Electricity charges have increased too high due to the factors beyond the control of the Nigam
during FY 2006-07. For projecting these expenditures Nigam have not considered the increased
growth rate as seen in the last financial year audited account and considered the average growth in
the expenditure head for the last five or six years.
3.104 There is growth in service charges for computerization expenses. However, most of these
expenses have been incurred during FY 2008-09 and for the current year and ensuing year a
nominal growth of 10% is considered for the purpose of projections.
3.105 Conveyance & traveling expenses have been are projected to increase by 6% during current year
and ensuing year.
3.106 As far as the capitalization of the A&G expenditure is concerned the same has been estimated on
the same percentage to the total A&G expenditure as in the last audited financial year.
3.107 The table given below summarizes the A&G Costs for FY 08-09, FY 09-10 & FY 10-11:
S.No. Particulars PY CY EY
In Rs Crores Provisional Estimate Projection
A) Administration Expenses
1 Rent rates and taxes (Other than all taxes on income and profit) 1.04 1.28 1.59
2 Insurance of employees, assets, legal liability 0.16 0.18 0.21

3 Revenue Stamp Expenses Account
4 Telephone, Postage, Telegram, Internet Charges 1.90 2.00 2.10
5 Incentive & Award To Employees/Outsiders
6 Consultancy Charges 4.47 5.59 6.99
7 Technical Fees
8 Other Professional Charges 0.01 0.02 0.02
9 Conveyance And Travel (vehicle hiring, running) 8.85 9.38 9.93
10 HERC License fee 1.00 1.00 1.00
11 Plant And Machinery 2.34 2.70 3.12
12 Security / Service Charges Paid To Outside Agencies
13 Regulatory Expenses
14 Ombudsman Expenses
15 Consumer Forum
Sub-Total of Administrative Expenses 19.78 22.15 24.96
B) Other Charges
1 Fee And Subscriptions Books And Periodicals
2 Printing And Stationery
3 Advertisement Expenses (Other Than Purchase Related) Exhibition &
Demo.
4 Contributions/Donations To Outside Institute / Association
5 Electricity Charges To Offices 31.67 40.34 51.40
6 Water Charges
7 Any Study - As per requirements 0.48 0.00 0.00
8 Miscellaneous Expenses 0.08 0.09 0.10
9 Public Interaction Program
10 Any Other expenses 8.85 9.26 10.18

Sub-Total of other charges 41.08 49.69 61.68
C) Legal Charges 0.87 0.91 0.95
D) Auditor's Fee 0.39 0.40 0.41
E) Freight - Material Related Expenses
F) Departmental Charges
G) Total Charges 62.12 73.15 88.00
H) Total Charges Chargeable To Capital Works 1.35 1.59 1.91
I) Total Charges Chargeable to Revenue Expenses 60.77 71.56 86.08
3.108 In context of above it is requested to Hon’ble Commission to kindly allow the projected A&G
cost on the basis of the reason and ground submitted above.
Repair & Maintenance (R&M) Expenses

3.109 R&M cost is meant for the upkeep of the system. R&M Costs have been estimated to be Rs. 83.95
Crore for FY 2010-11.
3.110 R&M expenses are being claimed in terms of Regulation 17(b) at the rate of 2% of average gross
fixed assets.The table given below summarizes the R&M expenses for FY 2008-09, FY 2009-10
& FY 2010-11.
Sl. No. Particulars PY CY EY

Figure in Rs Crore Provisional Estimate Projection
1 Plant & machinery 13.03 35.60 50.98
2 Buildings 2.52 2.96 4.24
3 Civil works 0.12 0.14 0.20
5 Lines cable net work etc. 16.95 18.14 25.97
6 Vehicles 0.77 1.78 2.54
7 Furniture & Fixture 0.00 0.00 0.00
8 Office Equipments 0.00 0.02 0.03
9 Any other items (Capitalisation)
Total 33.39 58.64 83.97

Extra-ordinary/onetime items
Difference in actuarial valuation

3.111 DHBVN makes provision for the pension, leave and gratuity contribution of the present
employees. The accounting of these pension, leave, and gratuity contribution is made on the basis
of the actuarial valuation report provided by the actuary. The actual payout generally takes place
at later stage. It is also pertinent to mention that at the time of filling of ARR, the estimation of
the actuary amount is made on the basis of the last year figures in the absence of the final report
of the actuary. After the receipt of the final report of the actuary valuation, it is observed that
generally there is difference between the figures filed in the ARR and the actuary valuation report.
3.112 Hon’ble Commission in its ARR orders always encourages licensee to claim pension, leave
gratuity contribution based on the certified actuarial valuation, and also encourages the
differences, if any, to be claimed in the next ARR.
3.113 It is also pertinent to mention that Hon’ble Commission in its order dated 1.1.2006 for HVPN has
allowed terminal benefit based on the actuarial valuation and Hon’ble Commission stated in that
order that any difference between the projected amount and the actual amount as per actuarial
valuation based on the actuary certificate will be allowed to licenses in the next ARR.
3.114 Based on the above facts, DHBVN has calculated the difference in the allowed pension, leave and
gratuity contribution by Hon’ble Commission since FY 2000-01 to FY 2007-08 and the certified
actuarial valuation.
3.115 While calculating the allowed expenses by Hon’ble commission when the ARR of DR&S was
filed by HVPNL, 50% of the allowed expenditure is considered as allowed pension, leave and
gratuity for DHBVN.
2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- Total

01 02 03 04 05 06 07 08
Difference in
actuarial valuation
Actual valuation 14.45 19.82 13.39 16.37 32.13 27.43 31.27 37.91 192.75
allowed by HERC
Payment made to the 32.92 39.51 41.81 45.00 150.27 36.00 47.29 186.06 578.85
trust as per actuary
valuation
Difference in 18.47 19.69 28.43 28.64 118.14 8.57 16.02 148.15 386.10
actuarial valuation
3.116 Accordingly, the Nigam claims an amount of Rs.386.10 Crores as difference of actuarial
valuation during FY 2010-11.
Other Debits
3.117 Other debits basically include cost of trading activities, provision for doubtful debts, misc. losses
and write off etc.

Provision for Bad and doubtful debt
3.118 In the service business like electricity sector where the consumer base is high, a large number
becomes defaulter and amounts become outstanding.
3.119 In the books of DHBVN the amount of old outstanding is appearing a huge amount and it is
proposed based on the normal and healthy business practice that these debtors need to be
gradually written off by way of making provision of bad and doubtful debt.
3.120 It is observed that the old outstanding which are older more than 3 years are increasing and
constitute around 27% of the total outstanding as per audited figures of FY 2008-09.
3.121 It is proposed to make a provision of 20% on the closing balance of outstanding which is more
than 3 years as on 31.03.2009. The calculation has been illustrated in the table given below:
Particulars 00-01 01-02 02-03 03-04 03-04 04-05 05-06 07-08 08-09
Total outstanding 547.2 816.81 899.63 1127.83 1437.90 1772.13 1882.66 1563.16 1846.75
6
Receivable from 93.15 154.15 206.73 230.95 462.61 577.67 579.80 491.14 500.42
consumer for more than
3 year
% of receivable more 17.02 18.87% 22.98% 20.48% 32.17% 32.60% 30.80% 31.42% 27.10%
than 3years out of total %
Provision for Bad & 100.08
Doubtful debt 20% of
receivable more than
3 years
3.122 The Projection for cost of trading activities have been made assuming a growth rate of 10%. The summary
of other debits is detailed hereunder:
Particulars Audited Projection Projection

2008-09 2009-10 2010-11
Cost of trading/manufacturing activities 39.47 43.42 47.76
Bad & doubtful debts written off 0.10 0.00 0.00
Refund of Revenue other than AP 0.46 0.42 0.38
Misc. losses and write off 3.66 5.86 9.38
Losses on account of flood, cyclone, fire to fixed 0.94 1.86 3.70
assets
Provision for bad and doubtful debts 0.00 0.00 100.08
Total Other Debits 44.63 51.56 161.30
Return on Equity
3.123 In terms of Regulation 16 of the Tariff Regulation, the licensee proposes to claim a return on
equity amounting to Rs.166.72 Crore for FY 2009-10 and Rs.208.98 Crore for FY 2010-11
calculated at the rate of 14%.

Shareholders’ Funds
Share Capital 946.42 1190.87 1492.73
Total Equity 946.42 1190.87 1492.73
Return as a % of Equity 14% 132.50 166.72 208.98

(14%)

Total Expenditure
3.124 The following table shows the total expenditure for the licensee for the FY 2008-09, FY 2009-10,
FY 2010-11.
Expenditure FY09 FY10 FY11

Purchase of Power 3453.22 4972.74 5573.18
Intra-State Transmission Charges 252.15 290.34 290.34
R&M Expense 33.39 58.64 83.97
Employee Expenses 490.27 506.62 502.94
A&G Expense 60.77 71.56 86.08
Depreciation 97.01 86.60 132.74
Interest & Finance Charges 244.82 359.33 585.14
Less: Interest & other expenses capitalised 65.08 88.90 141.12
Other Debits (incl. Prov for Bad debts) 44.63 51.56 161.30
Extraordinary Items 0.00 0.00 386.10
Other (Misc.)-net prior period credit/ (charges) -0.42 0.00 0.00
Total 4610.75 6308.49 7660.68
Reasonable Return 132.50 166.72 208.98
Other Income
Annual Revenue Requirement (2)+(3)-(4) 4743.25 6475.21 7869.66

Non-Tariff Income
Income from Investment and Non Tariff Income

3.125 ‘Income from Investment and Non-tariff Income’ is projected to increase by 12% in FY 2010-11
over FY 2009-10 and also in FY 2009-10 over the audited figure of FY 2008-09. Accordingly,
income from investment and NTI is estimated to be Rs.171.22 Crore during FY2009-10 and
projected to be Rs.193.03 Crore for FY 2010-11 as detailed in DF-3.
3.126 The component wise increase is discussed as under:
(a) In respect of Income from investment of contingency reserve fund, the projection is made on
the basis of half yearly booking in the FY 2009-10 and the same amount has been
projected for FY 2010-11 as no other basis is being envisaged.
(b) The projection for the meter rent and service rent for FY 2009-10 is made on the basis of the
actual booking in the first half of the FY 2009-10 after considering the growth in the
second half of FY 2008-09 in comparison to the first half of the FY 2008-09. For FY
2009-10 the growth of 5% is considered over the projected figures for FY 2010-11.
(c) In respect of Interest on staff loans & advance, delayed payment surcharge, other income and
miscellaneous receipts a growth of 10% is considered for FY 2009-10 and FY 2010-11 as
there is no fixed trend during last financial years.
(d) For income from power theft/malpractice an average rate of last year has been considered as
no definite pattern is visible. Accordingly, the income from theft/malpractice has been
projected to increase by 25% over FY 2008-09 during FY 2009-10 and FY2010-11
(e) In case of miscellaneous charges 10% projected growth for FY 2009-10 and FY 2010-11 has
been considered.
(f) Summary of total NTI is summerised hereunder:
Figure in Rs Crore Provisional Estimate Projection
A Income from Investment, Fixed & Call Deposits
1 Interest Income from Investments 3.14 3.39 3.63
2 Interest on fixed deposits 0.18 0.00 0.00
3 Interest from Banks other than Fixed Deposits
4 Interest on (any other items)
Sub-Total 3.32 3.39 3.63
B Non Tariff Income

1 Interest on loans and Advances to staff 1.49 1.64 1.81
2 Interest on Loans and Advances to Licensee
3 Interest on Loans and Advances to Lessors
4 Interest on Advances to Suppliers / Contractors
5 Income from Trading (other than Electricity) 90.20 103.73 119.29
6 Gain on Sale of Fixed Assets
7 Income/Fee/Collection against staff welfare activities
8 Miscellaneous receipts 0.77 0.81 0.85

9 Delayed payment charges from consumers 25.39 27.93 30.72
10 Meter Rent 16.37 17.12 17.98
11 Recovery from theft of energy 7.54 9.40 11.72
12 Wheeling charges
13 PLVC Charges
14 Misc. charges from consumers 7.34 7.19 7.05
15 Surcharge on Non Payment of subsidy by Govt
16 Surcharge for LVSS
17 Income from Other Business
18 Contract Demand Violation Charges
19 Harmonic Injection Violation Penalty
20 Disturbing Load Penalty
21 Less: Rebate for supply at higher voltage
Sub-Total 149.11 167.82 189.41
Total 152.42 171.22 193.03
RE Subsidy
3.127 Based on the cost of supply for each category based on report by ICRA placed for approval before
the Hon’ble Commission, total supply cost has been projected. Net aggregate revenue requirement
has been allocated on the same ratio as the supply cost for each category.
3.128 Revenue for each category has been assessed as provided in section for revenue assessed through
sales. The deficit or surplus has been calculated based on the difference in supply cost and
revenue assessed per category.
3.129 The following table provides summary of the deficit/surplus for each category.
Category Units sold Indicative Total cost Proportionate Revenue Cross Deficit
(in MU) cost as per Cost Assessed Subsidy/surplus
CoS of
ICRA
dt.29.10.09
Domestic 2961 5.60 1658.26 1747.77 974.23 0.00 773.55
Non-domestic 1081 5.27 569.91 600.68 453.12 0.00 147.56
LT Industry 721 5.21 375.90 396.19 308.80 0.00 87.39
AP(Metered) 2432 5.75 1398.68 1474.19 60.81 0.00 1413.37
AP(un-metered) 1687 5.75 970.31 1022.69 46.07 0.00 976.62
Horticulture 3 5.75 1.79 1.89 0.08 0.00 1.81
Irrigation 193 4.27 82.52 86.97 77.30 0.00 9.67
Street light 31 5.11 15.67 16.52 12.73 0.00 3.79
HT Industry 4062 3.95 1604.67 1691.29 1661.54 0.00 29.75
PWW 333 4.93 164.37 173.24 133.36 0.00 39.88
Railway traction 149 3.80 56.58 59.63 60.15 0.52 0.00
Bulk supply 839 4.19 351.42 370.39 338.84 0.00 31.55
Metro 84 3.97 33.39 35.19 33.39 0.00 1.80
Total 14579 7283.44 7676.62 4160.40 0.52 3516.74
3.130 From the above it can be seen that at the present tariff no category of consumer is expected to
generate cross subsidy except Railway Traction during FY2010-11. The total amount of subsidy
deficit for the FY 2010-11 is Rs. 3516.22 Crores including the deficit of Rs.2391.80 Crore on
account of agriculture consumers alone.

3.131 The Government of Haryana has indicated a subsidy provision of Rs 1199.25 Cr for FY 2010-11.
The subsidy details of the Government of Haryana is shown in the tables below:
Particulars Previous Current Year Ensuing Year

Year (Estimated) (Projected)
(Actual) FY 2009-10 FY 2010-11
FY 2008-09
Subsidy 1005.34 1155.00 1199.25
Net Revenue gap
3.132 The net revenue gap projected for FY 2009-10 and FY 2010-11 is summarised in the table below:
S. No Description FY 2009-10 FY 2010-11

A Aggregate Revenue Requirement 6475.21 7869.66
B Revenue from Tariff and Other Miscellaneous Charges 3433.21 4353.44
C Subsidy by Government of Haryana 1155.00 1199.25
D Net Revenue Gap (A-B-C) 1887..00 2316.97
3.133 The petitioner prays the Hon’ble Commission to approve suitable tariff hike to allow it to recover
the deficit for FY 2009-10 and FY 2010-11.
3.134 In addition to above, in terms of the Hon’ble Commission order on ARR for the FY 2008-09, the
licensee prays to allow for recovering an amount of revenue gap of Rs. 397.999 Cr along with the
carrying cost @ 11.50% per annum left uncovered for the FY 2008-09. The licensee has not
included this while projecting the aggregate revenue requirement for FY 2009-10 and FY 2010-
11.

Executivesummary 2010 11

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Executivesummary 2010 11

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Executive Summary of ARR filing of DHBVNL for Distribution and Retail

Supply Business for FY 2010-11

1. This Executive Summary of Annual Revenue Report (ARR) of Distribution and

2. Aggregate Revenue Requirement: The following forms present the consolidated

Executive Summary of ARR for FY 2010-11 – DHBVN 1

Executive Summary of ARR for FY 2010-11 – DHBVN 2

II. APPLICATION OF FUNDS

B) Investments 32.48 35.13 37.59

C) Current Assets, Loans and Advances

F) Miscellaneous Expenditure to the extent not written 288.46 288.46 288.46

TOTAL APPLICATION OF FUNDS 3093.77 3525.81 4775.83

Executive Summary of ARR for FY 2010-11 – DHBVN 3

II Net Increase /(Decrease) in Capital Liabilities:

Executive Summary of ARR for FY 2010-11 – DHBVN 4

Total II Net Increase /(Decrease) in Capital Liabilities (A - B) 1918.90 3105.30

III Increase/(Decrease) in Equity Capital 244.45 301.86

IV Total Funds available for Capital Expenditure (I+II+III) 1032.94 1571.20

V Funds Utilised on Capital Expenditure:

Executive Summary of ARR for FY 2010-11 – DHBVN 5

Power Purchase (MU) 13181 15556 18933

3 Reasonable Return 132.50 166.72 208.98

5 Annual Revenue Requirement (2)+(3)-(4) 4743.25 6475.21 7869.66

6 Surplus(+) / Shortfall(-) : (1)-(5) -397.77 -1887.00 -2316.97

7 Tariff Revision Impact

8 Surplus(+) / Shortfall(-) : (6)-(7) -397.77 -1887.00 -2316.97

Executive Summary of ARR for FY 2010-11 – DHBVN 6

Total Equity 946.42 1190.87 1492.73

Return as a % of Equity (14%) 14% 132.50 166.72 208.98

Executive Summary of ARR for FY 2010-11 – DHBVN 7

Inter state transmission loss % 4.23% 4.23%

Inter state transmission loss (MU) 839 789

Add energy generated within the State (MU) 12792 20805

Net Energy available for use in Haryana 31779 38679

Intra - state transmission loss (%) 2.10% 2.10%

Intra - state transmission loss (MU) 667 812

Energy available for sale to distribution licensees 26360.08 31112 37867

Energy Available for DHBVN 13180.04 15556 18933

3 Distribution Loss 25.19% 24% 23%

2 Energy Sales within the state

Executive Summary of ARR for FY 2010-11 – DHBVN 8

3.1 Share capital –

3.2 Contingency Reserve – A certain portion of revenue was earlier transferred to

3.3 Capital Consumer Contribution and grants –

(a) The amount of consumer contribution represents the share of initial

(c) During FY 2009-10, the Nigam is estimating a receipt of Rs.31 Crores by

Executive Summary of ARR for FY 2010-11 – DHBVN 9

3.5 Loan Fund -

3.6 Gross Fixed Assets(GFA)

Particulars Current Year 2009-10 Ensuing Year 2010-11

Opening Balance 2292.38 3571.66

Asset Type Percentage to total addition

Executive Summary of ARR for FY 2010-11 – DHBVN 10

3.9 Provision for Depreciation –

(b) However, it is not possible to classify the projected additions in fixed

Asset Type Opening Addition Disposal At the end of

Executive Summary of ARR for FY 2010-11 – DHBVN 11

CWIP 2009-10 2010-11

3.12 Contingency Reserve Investment - Contingency reserve investment with

Executive Summary of ARR for FY 2010-11 – DHBVN 12

(f) Current liability and payables – Current liability mainly constitutes

Executive Summary of ARR for FY 2010-11 – DHBVN 13

Executive Summary of ARR for FY 2010-11 – DHBVN 14