BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION KALYANI MARKET COMPLEX,BHUBANESWAR.

Transcription

1 BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION KALYANI MARKET COMPLEX,BHUBANESWAR. Case No. 65 of 2007 In the matter of : Western Electricity Supply Company of Orissa Limited (WESCO) And In the matter of : Shri Sudarshan Goel Director, M/s Subh Ispat Limited Kalunga Road, Rourkela Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year COMPARISION OF ORISSA TARIFF WITH OTHER STATES The tariff rates are determined by OERC keeping in view of recovery of energy charges from consumers against the revenue requirement of the Distribution Licensee. In Orissa, there is no subsidy to the distribution companies from the Govt. of Orissa which is not so in other states. The power purchased for Discoms by GRIDCO is from different sources with different rates. Higher power purchase cost is normally attributes due to higher consumption of industries. Again the availability of power and the rates of power purchase differ from state to state depending on their local conditions. However, it has been examined that the retail supply tariff is not higher in Orissa as compared to other States. 2. While fixing of tariff by Hon ble OERC, availability of power and the rates of purchase differ from state to state depending on their local conditions are being considered. It has been examined that the power tariff is not higher in Orissa as compared to other States. Hence cripple of industrialization does not arise. 3. POWER PROCUREMENT FROM HYDRO WESCO is purchasing power in bulk from GRIDCO who either purchase power from different generators which may be Hydro, Thermal or any other sources. Tariff rate both for Bulk supply as well as retail supply tariff (RST) is determined by OERC taking into consideration of all aspects i.e. power purchase for different source & power sale to all categories of consumers. In this context, the licensee has no role to determine the RST rate. Hence, the proposal of the objector is not applicable on the part of WESCO.

2 4. AVAILING POWER SUPPLY FROM M/S GRIDCO INSTEAD OF DISTCOs. M/s GRIDCO purchases power from different generating stations and sells to distribution companies through M/s OPTCL who has got transmission license. M/s WESCO is purchaser of bulk power from M/s GRIDCO and sells power in its area of license. The energy billed to HT / EHT Consumers is from the energy meter installed by WESCO & not from M/s GRIDCO meters. However in the regime of open access, a consumer has got option to purchase power from other agencies in accordance with the regulations framed by the regulatory commission pertaining to open access for different categories of consumers i.e. as per contract demand. 5. DISTRIBUTION LOSS & PREVENTION OF THEFT WESCO is taking various steps for reduction of distribution loss such as installation of Audit Metering for industrial consumers, cubicle metering, Energy Audit, Feeder Metering, System Improvement Work, regularisation of unauthorized consumers through consumer camps, vigilance checking, introduction of monthly spot billing in urban areas, putting parallel meters, giving HT supply through metering cubicles and XLPE cables for HT consumers. We have also started putting round the clock guards (Ex-military personal) at strategic location and taking the meter readings at very frequent interval for minimizing the theft of energy. Financial loss is assessed on the consumers found indulging in theft of energy and additional bill is raised accordingly as per I.E. Act Moreover in LT category, process is always on to replace the defective meters, years old electromechanical meters & consumers without meter. We have also started checking the meters of the consumers through our own MRT / Vigilance teams where consumption is found to be abnormally low. WESCO has started analysing the consumption pattern of high value consumers almost on daily basis for reduction of losses. Where ever uprating of network is necessary high rating conductor size is laid to reduce losses. Although in Domestic category more and more consumers have been brought to the billing fold it is not possible to eliminate tampering and by-passing of meters in totality due to the vast geographical area and large number of consumers. In practice it is noticed that loss reduction can only be a gradual process, which cannot be achieved to a high degree within a year. Operating at targeted figures of distribution loss is not feasible due to other related factors including lack of Administrative support. Input based franchisee have also been engaged in rural areas with monthly billing system who have been entrusted for meter readings, bill distribution and revenue collection. The energy police station has started functioning at Burla for Sambalpur district. However, there is no appreciable effect on the consumers indulging in theft of energy due to non-availability of adequate police personnel in the energy police station.

3 Further, although it has been decided by the Govt. to open energy police station in each district, it is yet to be materialized. Further, due to no change in RST for last 7 years and continuous increase in BST so far WESCO is concerned, no surplus is left for investment in system improvement, adequate operation & maintenance work, vigilance activities. Preclosure of APDRP schemes, inadequate funding of central assistance through State Govt. had considerable effect for which WESCO is not able to reduce distribution loss specifically in LT consumers. The rural electrification under PMGY & MNP has added a lot of line & transformer as has added to the distribution loss. 6. COLLECTION OF UN-REALISED AMOUNT :- WESCO has taken steps to collect the dues from its consumers. For defaulting consumers, power supply was disconnected after serving disconnection notice. Also WESCO is organizing collection camp in different areas to collect the dues and solve the dispute of the consumer if any. Hence, the contention of the objector that, unrealized amount are increasing and it affecting the genuine consumers is not true. As per the direction of Hon ble OERC, WESCO is carrying out receivable audit of all the outstanding arrear as on of LT category of consumers. We have already completed the audit work except two divisions i.e. Sambalpur & Sambalpur East which will be completed within a week time. As per the scope of the audit, the auditors have audited & certified the quantum of receivable amount out of the total outstanding. Based on the outcome of the receivable audit, WESCO is planning to collect the receivable amount as certified by the Chartered Accountants through internal staff, outside agencies / NGOs by introducing various incentive schemes. 7. THEFT OF ELECTRICITY :- The existing laws relating to theft of electricity are sufficient, but as everybody knows, due to non existence of energy police stations at every district for unauthorized use of electricity, theft cases are not being registered. As a result, the theft of electricity is not coming down and even people do not hesitate to hook the line in broad day light. The no. of hooking, tampering of meter is so high that it has out-numbered the existing employees to take proper steps for regularization / preventing of theft & tampering. Accordingly creation of special police stations in every district is a must. The objection of the consumers that transferring the cost is illegal and unethical is not true. The reduction of losses due to theft of energy will neutralize the expenditure and genuine consumers will derive benefit by way of reduction in tariff, quality and stable supply.

4 8. LOAD FACTOR BASED ON POWER ON HOUR Load factor of an industry is calculated as per the guidelines of OERC distribution (Conditions Of Supply) Code INCENTIVE ON IMPROVED POWER FACTOR To maintain good power factor of the system, an industrial consumer should have almost unity power factor and in no case it should be below 90%. In order to achieve unity power factor, the commission has provided incentive for improvement of power factor above 95% upto 100% which is quite reasonable. Further relaxation in the power factor for incentive will not only discourage the consumers for reaching higher power factor but also will affect demand and energy consumption. Accordingly, power factor incentive above 90% instead of 95% should not be allowed by the commission. Since availing power at very high power factor in giving an incentive to the consumer in terms of less demand for the same effective energy and also incentive as high load factor, the power factor incentive should be 97% in stead of 95% as approved by the Hon ble Commission earlier. 10. SECURITY DEPOSIT Bank guarantee against security deposit should not be allowed to the consumers as it will be very difficult to monitor the expiry date of the Bank Guarantee and its renewal. Further the Hon ble Commission has already permitted payment of annual interest on Security Deposit to consumers. Regarding installation of pre-paid meter, till date, the same is not available in the market. 11. PROMPT PAYMENT REBATE The present rebate of 1% of the monthly bill if full payment made within 72 hrs of presentation of bills is an adequate incentive. However, the licensee pays the bill for the energy purchase for all its consumers as a whole to GRIDCO within 48 hours through an LC mechanism and the bills are submitted to the licensee by GRIDCO / OPTCL with a copy to the bank. 12. PERIOD OF AGREEMENT TO BE REDUCED TO 1 YEAR While making projection on load forecasting and estimate for investment plans, it is considered that an existing load continues for at least five years. If the period of agreement is reduced, there will be frequent termination and execution of agreements. As a result of the same, a situation of chaos will arise. Also it may so

5 happen that resources created may be left underutilized. Keeping all these points in view, the proposal be rejected. 13. Excess amount realization over & above BST has been taken by GRIDCO towards past losses for which no money is left to carryout improvement activities. However due to no increase in RST and considerable increase in BST, WESCO has already made a loss of Rs crores from Apr-07 to Dec-07 during the financial year WESCO has proposed for hike in demand charges in case of consumers having CD is 70 KVA and above but below 110 KVA. The wide difference in demand charges between HT and high valued MI consumers is tempting to the MI consumers for pilferage of electricity and suppressing the demand even if there connected load is more than 110 KVA. For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager (Commercial) C.C : Shri Sudarshan Goel Director, M/s Subh Ispat Limited Kalunga Road, Rourkela Note- This is also available at the licensee s website-

6 BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION KALYANI MARKET COMPLEX,BHUBANESWAR. Case No. 65 of 2007 In the matter of : Western Electricity Supply Company of Orissa Limited (WESCO) And In the matter of : Shri Sunil Agarwal Director, M/s Sri Jagannath Alloys Pvt. Ltd. Basanti Colony Road, Rourkela Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year COMPARISION OF ORISSA TARIFF WITH OTHER STATES The tariff rates are determined by OERC keeping in view of recovery of energy charges from consumers against the revenue requirement of the Distribution Licensee. In Orissa, there is no subsidy to the distribution companies from the Govt. of Orissa which is not so in other states. The power purchased for Discoms by GRIDCO is from different sources with different rates. Higher power purchase cost is normally attributes due to higher consumption of industries. Again the availability of power and the rates of power purchase differ from state to state depending on their local conditions. However, it has been examined that the retail supply tariff is not higher in Orissa as compared to other States. 2. While fixing of tariff by Hon ble OERC, availability of power and the rates of purchase differ from state to state depending on their local conditions are being considered. It has been examined that the power tariff is not higher in Orissa as compared to other States. Hence cripple of industrialization does not arise. 3. POWER PROCUREMENT FROM HYDRO WESCO is purchasing power in bulk from GRIDCO who either purchase power from different generators which may be Hydro, Thermal or any other sources. Tariff rate both for Bulk supply as well as retail supply tariff (RST) is determined by OERC taking into consideration of all aspects i.e. power purchase for different source & power sale to all categories of consumers. In this context, the licensee has no role to determine the RST rate. Hence, the proposal of the objector is not applicable on the part of WESCO.

7 4. AVAILING POWER SUPPLY FROM M/S GRIDCO INSTEAD OF DISTCOs. M/s GRIDCO purchases power from different generating stations and sells to distribution companies through M/s OPTCL who has got transmission license. M/s WESCO is purchaser of bulk power from M/s GRIDCO and sells power in its area of license. The energy billed to HT / EHT Consumers is from the energy meter installed by WESCO & not from M/s GRIDCO meters. However in the regime of open access, a consumer has got option to purchase power from other agencies in accordance with the regulations framed by the regulatory commission pertaining to open access for different categories of consumers i.e. as per contract demand. 5. DISTRIBUTION LOSS & PREVENTION OF THEFT WESCO is taking various steps for reduction of distribution loss such as installation of Audit Metering for industrial consumers, cubicle metering, Energy Audit, Feeder Metering, System Improvement Work, regularisation of unauthorized consumers through consumer camps, vigilance checking, introduction of monthly spot billing in urban areas, putting parallel meters, giving HT supply through metering cubicles and XLPE cables for HT consumers. We have also started putting round the clock guards (Ex-military personal) at strategic location and taking the meter readings at very frequent interval for minimizing the theft of energy. Financial loss is assessed on the consumers found indulging in theft of energy and additional bill is raised accordingly as per I.E. Act Moreover in LT category, process is always on to replace the defective meters, years old electromechanical meters & consumers without meter. We have also started checking the meters of the consumers through our own MRT / Vigilance teams where consumption is found to be abnormally low. WESCO has started analysing the consumption pattern of high value consumers almost on daily basis for reduction of losses. Where ever uprating of network is necessary high rating conductor size is laid to reduce losses. Although in Domestic category more and more consumers have been brought to the billing fold it is not possible to eliminate tampering and by-passing of meters in totality due to the vast geographical area and large number of consumers. In practice it is noticed that loss reduction can only be a gradual process, which cannot be achieved to a high degree within a year. Operating at targeted figures of distribution loss is not feasible due to other related factors including lack of Administrative support. Input based franchisee have also been engaged in rural areas with monthly billing system who have been entrusted for meter readings, bill distribution and revenue collection. The energy police station has started functioning at Burla for Sambalpur district. However, there is no appreciable effect on the consumers indulging in theft of energy due to non-availability of adequate police personnel in the energy police station.

8 Further, although it has been decided by the Govt. to open energy police station in each district, it is yet to be materialized. Further, due to no change in RST for last 7 years and continuous increase in BST so far WESCO is concerned, no surplus is left for investment in system improvement, adequate operation & maintenance work, vigilance activities. Preclosure of APDRP schemes, inadequate funding of central assistance through State Govt. had considerable effect for which WESCO is not able to reduce distribution loss specifically in LT consumers. The rural electrification under PMGY & MNP has added a lot of line & transformer as has added to the distribution loss. 6. COLLECTION OF UN-REALISED AMOUNT :- WESCO has taken steps to collect the dues from its consumers. For defaulting consumers, power supply was disconnected after serving disconnection notice. Also WESCO is organizing collection camp in different areas to collect the dues and solve the dispute of the consumer if any. Hence, the contention of the objector that, unrealized amount are increasing and it affecting the genuine consumers is not true. As per the direction of Hon ble OERC, WESCO is carrying out receivable audit of all the outstanding arrear as on of LT category of consumers. We have already completed the audit work except two divisions i.e. Sambalpur & Sambalpur East which will be completed within a week time. As per the scope of the audit, the auditors have audited & certified the quantum of receivable amount out of the total outstanding. Based on the outcome of the receivable audit, WESCO is planning to collect the receivable amount as certified by the Chartered Accountants through internal staff, outside agencies / NGOs by introducing various incentive schemes. 7. THEFT OF ELECTRICITY :- The existing laws relating to theft of electricity are sufficient, but as everybody knows, due to non existence of energy police stations at every district for unauthorized use of electricity, theft cases are not being registered. As a result, the theft of electricity is not coming down and even people do not hesitate to hook the line in broad day light. The no. of hooking, tampering of meter is so high that it has out-numbered the existing employees to take proper steps for regularization / preventing of theft & tampering. Accordingly creation of special police stations in every district is a must. The objection of the consumers that transferring the cost is illegal and unethical is not true. The reduction of losses due to theft of energy will neutralize the expenditure and genuine consumers will derive benefit by way of reduction in tariff, quality and stable supply.

9 8. LOAD FACTOR BASED ON POWER ON HOUR Load factor of an industry is calculated as per the guidelines of OERC distribution (Conditions Of Supply) Code INCENTIVE ON IMPROVED POWER FACTOR To maintain good power factor of the system, an industrial consumer should have almost unity power factor and in no case it should be below 90%. In order to achieve unity power factor, the commission has provided incentive for improvement of power factor above 95% upto 100% which is quite reasonable. Further relaxation in the power factor for incentive will not only discourage the consumers for reaching higher power factor but also will affect demand and energy consumption. Accordingly, power factor incentive above 90% instead of 95% should not be allowed by the commission. Since availing power at very high power factor in giving an incentive to the consumer in terms of less demand for the same effective energy and also incentive as high load factor, the power factor incentive should be 97% in stead of 95% as approved by the Hon ble Commission earlier. 10. SECURITY DEPOSIT Bank guarantee against security deposit should not be allowed to the consumers as it will be very difficult to monitor the expiry date of the Bank Guarantee and its renewal. Further the Hon ble Commission has already permitted payment of annual interest on Security Deposit to consumers. Regarding installation of pre-paid meter, till date, the same is not available in the market. 11. PROMPT PAYMENT REBATE The present rebate of 1% of the monthly bill if full payment made within 72 hrs of presentation of bills is an adequate incentive. However, the licensee pays the bill for the energy purchase for all its consumers as a whole to GRIDCO within 48 hours through an LC mechanism and the bills are submitted to the licensee by GRIDCO / OPTCL with a copy to the bank. 12. PERIOD OF AGREEMENT TO BE REDUCED TO 1 YEAR While making projection on load forecasting and estimate for investment plans, it is considered that an existing load continues for at least five years. If the period of agreement is reduced, there will be frequent termination and execution of agreements. As a result of the same, a situation of chaos will arise. Also it may so

10 happen that resources created may be left underutilized. Keeping all these points in view, the proposal be rejected. 13. Excess amount realization over & above BST has been taken by GRIDCO towards past losses for which no money is left to carryout improvement activities. However due to no increase in RST and considerable increase in BST, WESCO has already made a loss of Rs crores from Apr-07 to Dec-07 during the financial year WESCO has proposed for hike in demand charges in case of consumers having CD is 70 KVA and above but below 110 KVA. The wide difference in demand charges between HT and high valued MI consumers is tempting to the MI consumers for pilferage of electricity and suppressing the demand even if there connected load is more than 110 KVA. For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager (Commercial) C.C : Shri Sunil Agarwal Director, M/s Sri Jagannath Alloys Pvt. Ltd. Basanti Colony Road, Rourkela Note- This is also available at the licensee s website-

11 BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION KALYANI MARKET COMPLEX,BHUBANESWAR. Case No. 65 of 2007 In the matter of : Western Electricity Supply Company of Orissa Limited (WESCO) And In the matter of : Shri Amit Agarwal Director, M/s Bajrangbali Re-rollers Pvt. Ltd. Lal Building, Kachery Road, Rourkela Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year COMPARISION OF ORISSA TARIFF WITH OTHER STATES The tariff rates are determined by OERC keeping in view of recovery of energy charges from consumers against the revenue requirement of the Distribution Licensee. In Orissa, there is no subsidy to the distribution companies from the Govt. of Orissa which is not so in other states. The power purchased for Discoms by GRIDCO is from different sources with different rates. Higher power purchase cost is normally attributes due to higher consumption of industries. Again the availability of power and the rates of power purchase differ from state to state depending on their local conditions. However, it has been examined that the retail supply tariff is not higher in Orissa as compared to other States. 2. While fixing of tariff by Hon ble OERC, availability of power and the rates of purchase differ from state to state depending on their local conditions are being considered. It has been examined that the power tariff is not higher in Orissa as compared to other States. Hence cripple of industrialization does not arise. 3. POWER PROCUREMENT FROM HYDRO WESCO is purchasing power in bulk from GRIDCO who either purchase power from different generators which may be Hydro, Thermal or any other sources. Tariff rate both for Bulk supply as well as retail supply tariff (RST) is determined by OERC taking into consideration of all aspects i.e. power purchase for different source & power sale to all categories of consumers. In this context, the licensee has no role to determine the RST rate. Hence, the proposal of the objector is not applicable on the part of WESCO.

12 4. AVAILING POWER SUPPLY FROM M/S GRIDCO INSTEAD OF DISTCOs. M/s GRIDCO purchases power from different generating stations and sells to distribution companies through M/s OPTCL who has got transmission license. M/s WESCO is purchaser of bulk power from M/s GRIDCO and sells power in its area of license. The energy billed to HT / EHT Consumers is from the energy meter installed by WESCO & not from M/s GRIDCO meters. However in the regime of open access, a consumer has got option to purchase power from other agencies in accordance with the regulations framed by the regulatory commission pertaining to open access for different categories of consumers i.e. as per contract demand. 5. DISTRIBUTION LOSS & PREVENTION OF THEFT WESCO is taking various steps for reduction of distribution loss such as installation of Audit Metering for industrial consumers, cubicle metering, Energy Audit, Feeder Metering, System Improvement Work, regularisation of unauthorized consumers through consumer camps, vigilance checking, introduction of monthly spot billing in urban areas, putting parallel meters, giving HT supply through metering cubicles and XLPE cables for HT consumers. We have also started putting round the clock guards (Ex-military personal) at strategic location and taking the meter readings at very frequent interval for minimizing the theft of energy. Financial loss is assessed on the consumers found indulging in theft of energy and additional bill is raised accordingly as per I.E. Act Moreover in LT category, process is always on to replace the defective meters, years old electromechanical meters & consumers without meter. We have also started checking the meters of the consumers through our own MRT / Vigilance teams where consumption is found to be abnormally low. WESCO has started analysing the consumption pattern of high value consumers almost on daily basis for reduction of losses. Where ever uprating of network is necessary high rating conductor size is laid to reduce losses. Although in Domestic category more and more consumers have been brought to the billing fold it is not possible to eliminate tampering and by-passing of meters in totality due to the vast geographical area and large number of consumers. In practice it is noticed that loss reduction can only be a gradual process, which cannot be achieved to a high degree within a year. Operating at targeted figures of distribution loss is not feasible due to other related factors including lack of Administrative support. Input based franchisee have also been engaged in rural areas with monthly billing system who have been entrusted for meter readings, bill distribution and revenue collection. The energy police station has started functioning at Burla for Sambalpur district. However, there is no appreciable effect on the consumers indulging in theft of energy due to non-availability of adequate police personnel in the energy police station.

13 Further, although it has been decided by the Govt. to open energy police station in each district, it is yet to be materialized. Further, due to no change in RST for last 7 years and continuous increase in BST so far WESCO is concerned, no surplus is left for investment in system improvement, adequate operation & maintenance work, vigilance activities. Preclosure of APDRP schemes, inadequate funding of central assistance through State Govt. had considerable effect for which WESCO is not able to reduce distribution loss specifically in LT consumers. The rural electrification under PMGY & MNP has added a lot of line & transformer as has added to the distribution loss. 6. COLLECTION OF UN-REALISED AMOUNT :- WESCO has taken steps to collect the dues from its consumers. For defaulting consumers, power supply was disconnected after serving disconnection notice. Also WESCO is organizing collection camp in different areas to collect the dues and solve the dispute of the consumer if any. Hence, the contention of the objector that, unrealized amount are increasing and it affecting the genuine consumers is not true. As per the direction of Hon ble OERC, WESCO is carrying out receivable audit of all the outstanding arrear as on of LT category of consumers. We have already completed the audit work except two divisions i.e. Sambalpur & Sambalpur East which will be completed within a week time. As per the scope of the audit, the auditors have audited & certified the quantum of receivable amount out of the total outstanding. Based on the outcome of the receivable audit, WESCO is planning to collect the receivable amount as certified by the Chartered Accountants through internal staff, outside agencies / NGOs by introducing various incentive schemes. 7. THEFT OF ELECTRICITY :- The existing laws relating to theft of electricity are sufficient, but as everybody knows, due to non existence of energy police stations at every district for unauthorized use of electricity, theft cases are not being registered. As a result, the theft of electricity is not coming down and even people do not hesitate to hook the line in broad day light. The no. of hooking, tampering of meter is so high that it has out-numbered the existing employees to take proper steps for regularization / preventing of theft & tampering. Accordingly creation of special police stations in every district is a must. The objection of the consumers that transferring the cost is illegal and unethical is not true. The reduction of losses due to theft of energy will neutralize the expenditure and genuine consumers will derive benefit by way of reduction in tariff, quality and stable supply.

14 8. LOAD FACTOR BASED ON POWER ON HOUR Load factor of an industry is calculated as per the guidelines of OERC distribution (Conditions Of Supply) Code INCENTIVE ON IMPROVED POWER FACTOR To maintain good power factor of the system, an industrial consumer should have almost unity power factor and in no case it should be below 90%. In order to achieve unity power factor, the commission has provided incentive for improvement of power factor above 95% upto 100% which is quite reasonable. Further relaxation in the power factor for incentive will not only discourage the consumers for reaching higher power factor but also will affect demand and energy consumption. Accordingly, power factor incentive above 90% instead of 95% should not be allowed by the commission. Since availing power at very high power factor in giving an incentive to the consumer in terms of less demand for the same effective energy and also incentive as high load factor, the power factor incentive should be 97% in stead of 95% as approved by the Hon ble Commission earlier. 10. SECURITY DEPOSIT Bank guarantee against security deposit should not be allowed to the consumers as it will be very difficult to monitor the expiry date of the Bank Guarantee and its renewal. Further the Hon ble Commission has already permitted payment of annual interest on Security Deposit to consumers. Regarding installation of pre-paid meter, till date, the same is not available in the market. 11. PROMPT PAYMENT REBATE The present rebate of 1% of the monthly bill if full payment made within 72 hrs of presentation of bills is an adequate incentive. However, the licensee pays the bill for the energy purchase for all its consumers as a whole to GRIDCO within 48 hours through an LC mechanism and the bills are submitted to the licensee by GRIDCO / OPTCL with a copy to the bank. 12. PERIOD OF AGREEMENT TO BE REDUCED TO 1 YEAR While making projection on load forecasting and estimate for investment plans, it is considered that an existing load continues for at least five years. If the period of agreement is reduced, there will be frequent termination and execution of agreements. As a result of the same, a situation of chaos will arise. Also it may so

15 happen that resources created may be left underutilized. Keeping all these points in view, the proposal be rejected. 13. Excess amount realization over & above BST has been taken by GRIDCO towards past losses for which no money is left to carryout improvement activities. However due to no increase in RST and considerable increase in BST, WESCO has already made a loss of Rs crores from Apr-07 to Dec-07 during the financial year WESCO has proposed for hike in demand charges in case of consumers having CD is 70 KVA and above but below 110 KVA. The wide difference in demand charges between HT and high valued MI consumers is tempting to the MI consumers for pilferage of electricity and suppressing the demand even if there connected load is more than 110 KVA. For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager (Commercial) C.C : Shri Amit Agarwal Director, M/s Bajrangbali Re-rollers Pvt. Ltd. Lal Building, Kachery Road, Rourkela Note- This is also available at the licensee s website-

16 BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION KALYANI MARKET COMPLEX,BHUBANESWAR. Case No. 65 of 2007 In the matter of : Western Electricity Supply Company of Orissa Limited (WESCO) And In the matter of : Shri Suvendu Kumar Das General Manager, M/s Scan Steels Limited Main Road, Rajgangpur, Dist. : Sundergarh. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year COMPARISION OF ORISSA TARIFF WITH OTHER STATES The tariff rates are determined by OERC keeping in view of recovery of energy charges from consumers against the revenue requirement of the Distribution Licensee. In Orissa, there is no subsidy to the distribution companies from the Govt. of Orissa which is not so in other states. The power purchased for Discoms by GRIDCO is from different sources with different rates. Higher power purchase cost is normally attributes due to higher consumption of industries. Again the availability of power and the rates of power purchase differ from state to state depending on their local conditions. However, it has been examined that the retail supply tariff is not higher in Orissa as compared to other States. 2. While fixing of tariff by Hon ble OERC, availability of power and the rates of purchase differ from state to state depending on their local conditions are being considered. It has been examined that the power tariff is not higher in Orissa as compared to other States. Hence cripple of industrialization does not arise. 3. POWER PROCUREMENT FROM HIRAKUD & CHIPILIMA THROUGH HYDRO :- WESCO is purchasing power in bulk from GRIDCO who either purchase power from different generators which may be Hydro, Thermal or any other sources. Tariff rate both for Bulk supply as well as retail supply tariff (RST) is determined by OERC taking into consideration of all aspects i.e. power purchase for different source & power sale to all categories of consumers. In this context, the licensee has no role to

17 determine the RST rate. Hence, the proposal of the objector is not applicable on the part of WESCO. 4. AVAILING POWER SUPPLY FROM M/S GRIDCO INSTEAD OF DISTCOs. License is issued by OERC for distribution of electricity in various zones of the state to various companies. Hence question of competition among distribution companies does not arise. Since RST is determined considering Orissa as a whole state, there cannot be variation of rate in respect to categories of consumers. However, the BST rate is determined by the Hon ble Commission depending upon no. of EHT & HT category of consumers of a particular zone which may vary from zone to zone and no monopoly in respect of WESCO arises and there is no tariff variation under RST category in respect of distribution companies. 5. DISTRIBUTION LOSS & PREVENTION OF THEFT WESCO is taking various steps for reduction of distribution loss such as installation of Audit Metering for industrial consumers, cubicle metering, Energy Audit, Feeder Metering, System Improvement Work, regularisation of unauthorized consumers through consumer camps, vigilance checking, introduction of monthly spot billing in urban areas, putting parallel meters, giving HT supply through metering cubicles and XLPE cables for HT consumers. We have also started putting round the clock guards (Ex-military personal) at strategic location and taking the meter readings at very frequent interval for minimizing the theft of energy. Financial loss is assessed on the consumers found indulging in theft of energy and additional bill is raised accordingly as per I.E. Act Moreover in LT category, process is always on to replace the defective meters, years old electromechanical meters & consumers without meter. We have also started checking the meters of the consumers through our own MRT / Vigilance teams where consumption is found to be abnormally low. WESCO has started analysing the consumption pattern of high value consumers almost on daily basis for reduction of losses. Where ever uprating of network is necessary high rating conductor size is laid to reduce losses. Although in Domestic category more and more consumers have been brought to the billing fold it is not possible to eliminate tampering and by-passing of meters in totality due to the vast geographical area and large number of consumers. In practice it is noticed that loss reduction can only be a gradual process, which cannot be achieved to a high degree within a year. Operating at targeted figures of distribution loss is not feasible due to other related factors including lack of Administrative support. Input based franchisee have also been engaged in rural areas with monthly billing system who have been entrusted for meter readings, bill distribution and revenue collection. The energy police station has started functioning at Burla for Sambalpur district.

18 However, there is no appreciable effect on the consumers indulging in theft of energy due to non-availability of adequate police personnel in the energy police station. Further, although it has been decided by the Govt. to open energy police station in each district, it is yet to be materialized. Further, due to no change in RST for last 7 years and continuous increase in BST so far WESCO is concerned, no surplus is left for investment in system improvement, adequate operation & maintenance work, vigilance activities. Preclosure of APDRP schemes, inadequate funding of central assistance through State Govt. had considerable effect for which WESCO is not able to reduce distribution loss specifically in LT consumers. The rural electrification under PMGY & MNP has added a lot of line & transformer as has added to the distribution loss. 6. LOAD FACTOR INCENTIVE :- The Hon ble Commission has already allowed load factor incentive beyond 50%. The amount lost due to the above is being passed on to the Consumers while fixing the tariff. As such any further incentive on load factor will have an adverse affect on the Consumers. Hon ble Commission is requested not to accept the proposal. 7. LOAD FACTOR BASED ON POWER ON HOUR Load factor of an industry is calculated as per the guidelines of OERC distribution (Conditions Of Supply) Code INCENTIVE ON IMPROVED POWER FACTOR To maintain good power factor of the system, an industrial consumer should have almost unity power factor and in no case it should be below 90%. In order to achieve unity power factor, the commission has provided incentive for improvement of power factor above 95% upto 100% which is quite reasonable. Further relaxation in the power factor for incentive will not only discourage the consumers for reaching higher power factor but also will affect demand and energy consumption. Accordingly, power factor incentive above 90% instead of 95% should not be allowed by the commission. Since availing power at very high power factor in giving an incentive to the consumer in terms of less demand for the same effective energy and also incentive as high load factor, the power factor incentive should be 97% in stead of 95% as approved by the Hon ble Commission earlier. 9. SECURITY DEPOSIT Bank guarantee against security deposit should not be allowed to the consumers as it will be very difficult to monitor the expiry date of the Bank

19 Guarantee and its renewal. Further the Hon ble Commission has already permitted payment of annual interest on Security Deposit to consumers. Regarding installation of pre-paid meter, till date, the same is not available in the market. 10. PROMPT PAYMENT REBATE The present rebate of 1% of the monthly bill if full payment made within 72 hrs of presentation of bills is an adequate incentive. However, the licensee pays the bill for the energy purchase for all its consumers as a whole to GRIDCO within 48 hours through an LC mechanism and the bills are submitted to the licensee by GRIDCO / OPTCL with a copy to the bank. 11. PERIOD OF AGREEMENT TO BE REDUCED TO 1 YEAR While making projection on load forecasting and estimate for investment plans, it is considered that an existing load continues for at least five years. If the period of agreement is reduced, there will be frequent termination and execution of agreements. As a result of the same, a situation of chaos will arise. Also it may so happen that resources created may be left underutilized. Keeping all these points in view, the proposal be rejected. 12. Excess amount realization over & above BST has been taken by GRIDCO towards past losses for which no money is left to carryout improvement activities. However due to no increase in RST and considerable increase in BST, WESCO has already made a loss of Rs crores from Apr-07 to Dec-07 during the financial year WESCO has proposed for hike in demand charges in case of consumers having CD is 70 KVA and above but below 110 KVA. The wide difference in demand charges between HT and high valued MI consumers is tempting to the MI consumers for pilferage of electricity and suppressing the demand even if there connected load is more than 110 KVA. 14. DEMAND CHARGES FOR C.P.P. As pointed out by the objector, consumers having CPP require emergency power for plant overhauling when there is single unit operation, which may be for a period of 20 to 30 days in a year. However, incase of outage of CPP due to system disturbances, they require start up power which will effect the SMD for the entire month even if the drawal of power is half an hour for which distribution licensee will have to pay to GRIDCO without charging the same to the concerned CPP. This may

20 put the Distco into financial burden. To avoid such unforeseen cost, it has been proposed to the Hon ble Commission for considering the demand 120% of the demand charges applicable to the respective tariff category on the maximum demand recorded by the meter of the CPP. However, the minimum demand charge concept i.e. 80% of CD should not be applicable to the CPPs. For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager (Commercial) C.C : Shri Suvendu Kumar Das General Manager, M/s Scan Steels Limited Main Road, Rajgangpur, Dist. : Sundergarh. Note- This is also available at the licensee s website-

21 BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION KALYANI MARKET COMPLEX,BHUBANESWAR. Case No. 65 of 2007 In the matter of : Western Electricity Supply Company of Orissa Limited (WESCO) And In the matter of : Shri Chittaranjan Mohanty President, Basanti Forum, Basanti Nagar Rourkela. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year There is no change in RST for last 7 years and continuous increase in BST in the context of WESCO. Regarding infusion of capital, it is responsibility of the stakeholder to infuse capital where the state govt. is 49% stake-holder. 2. The licensee has not proposed any hike in tariff structure for the year Hence the objection raised by the objector should not be considered. Again due to no increase in RST and considerable increase in BST, WESCO has already made a loss of Rs Crores (only BST impact) from Apr-07 to Dec-07 during the financial year The licensee has not proposed for any tariff hike for the year Hence, as pointed-out by the objector to make profit by the licensee to hike tariff in various ways is not true. Only the rate of return as per the norms has been considered. 4. The licensee for distribution of power in a particular zone is being determined by Hon ble OERC and the performance of the distribution companies is being very closely monitored by OERC. Since purchase and sale rate of return (%) is being determined by the Hon ble Commission there is neither monopoly nor profit making in our own way. 5. As objected by the objector regarding low voltage at Basanti Nagar, there is no low voltage problem in that locality and the supply voltage is within the permissible limit.

22 6. WESCO is not indulging any power cut except when there is system constraint or non-availability of power from GRIDCO on real-time basis or interruption of line due to fault / break-down. Regarding undeclared power cut by WESCO as objected by the objector is not true. 7. Despite of fund constraint of the licensee, the licensee has taken every effort to improve the existing lines & sub-stations in rural areas. However, electrical accidents do not occur due to poor maintenance of lines but due to some other reasons, like theft of conductor, cutting the stay wire at stay-point, snapping of conductors due to cutting of tree branches etc. Inspite of that, the licensee is creating public awareness by the way of campaigning, leaf-let, banner, press release etc to avoid electrical accident. 7. That, WESCO is taking early action on the complaints of the consumers. Also for quick action, Customer care centre is functioning at urban areas presently at Sambalpur. Customer care is likely to operate at Rourkela shortly and will also extend to the other district headquarter in a phased manner. Hence, as objected by the objector non-attending the complaints of the consumer is not true and need to be rejected by the Hon ble Commission. 8. The licensee has taken utmost care to provide steady power supply to its consumers. Regarding consumer grievances, in every sub-division, division and circle offices, there is a consumer grievances cell is functioning for quick disposal of consumer grievances. Apart from that, Grievance Redressal Forum (GRF) is also functioning at every circle as per the direction of Hon ble OERC. 9. The licensee has no role in generation of electricity. So question of suffering of inhaling dust and sacrificing agricultural land is not applicable to the licensee. Hence the objection raised by the objector doesnot hold good. 10. CHEAPEST MODE OF ENERGY FROM HYDRO Though hydro-power is the cheapest mode of energy but as per the guidelines of WESCO is purchasing power in bulk from GRIDCO who purchase power from different generators which may be Hydro, Thermal or any other sources. 11. POWER PROCUREMENT FROM HYDRO WESCO is purchasing power in bulk from GRIDCO who either purchase power from different generators which may be Hydro, Thermal or any other sources. Tariff rate both for Bulk supply as well as retail supply tariff (RST) is determined by OERC taking into consideration of all aspects i.e. power purchase for different source &

23 power sale to all categories of consumers. In this context, the licensee has no role to determine the RST rate. Hence, the proposal of the objector is not applicable on the part of WESCO. 12. WESCO is an independent company where Govt. of Orissa / GRIDCO and Reliance Energy Limited are stake-holder and it has independent Board of Directors. Regarding infusion of capital, it is prime responsibility of the stake-holders to infuse capital where GRIDCO is also a stake holder with 49% stake. Regarding security deposit of the consumer is concerned, the same is not being transferred physically during privatization. The Board of Directors of WESCO having nominees of GRIDCO as well as Reliance Energy Limited are to decide for infusion of capital in shape of equity for improvement. 13. Due to no increase in RST since for last seven years and considerable increase in BST, WESCO has already incurred a loss of Rs Crores (only BST impact) from Apr-07 to Dec-07 during the financial year In spite of that, the licensee has not proposed for any tariff hike in RST for the year Hence, as pointed-out by the objector to make profit by the licensee is not acceptable. 14. The licensee is taking every effort to reduce the T & D loss which is a gradual process. 15. As per the OERC guidelines, once the cost of meter is recovered from the consumer, no meter rent is being levied by the licensee. The billing software is developed accordingly and it will not charge after recovery of the meter cost. For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager (Commercial) C.C : Shri Chittaranjan Mohanty President, Basanti Forum, Basanti Nagar Rourkela. Note- This is also available at the licensee s website-

24 BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION KALYANI MARKET COMPLEX,BHUBANESWAR. Case No. 65 of 2007 In the matter of : Western Electricity Supply Company of Orissa Limited (WESCO) And In the matter of : Shri Samir Kumar Mishra Belpahar, Jharsuguda. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year There is no change in RST for last 7 years and continuous increase in BST in the context of WESCO. Regarding infusion of capital, it is responsibility of the stakeholder to infuse capital where the state govt. is 49% stake-holder. 2. The licensee has not proposed any hike in tariff structure for the year Hence the objection raised by the objector should not be considered. Again due to no increase in RST and considerable increase in BST, WESCO has already made a loss of Rs Crores (only BST impact) from Apr-07 to Dec-07 during the financial year The licensee has not proposed for any tariff hike for the year Hence, as pointed-out by the objector to make profit by the licensee to hike tariff in various ways is not true. Only the rate of return as per the norms has been considered. 4. The licensee for distribution of power in a particular zone is being determined by Hon ble OERC and the performance of the distribution companies is being very closely monitored by OERC. Since purchase and sale rate of return (%) is being determined by the Hon ble Commission there is neither monopoly nor profit making in our own way. 5. As objected by the objector regarding low voltage at Basanti Nagar, there is no low voltage problem in that locality and the supply voltage is within the permissible limit.