The instant petition has been filed by Power Grid Corporation of India Ltd. (hereinafter referred to as the Petitioner), a deemed transmission licensee, for truing-up of transmission tariff for the 2014-19 tariff period under the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014 (hereinafter referred to as the 2014 Tariff Regulations) and determination of tariff of the 2019-24 tariff period under the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2019 (hereinafter referred to as the 2019 Tariff Regulations) in respect of following assets under Provision of Spare ICTs and Reactors for Eastern, Northern, Southern and Western Regions (hereinafter referred to as the transmission scheme): Asset-1: 1 No. 315 MVA, 400/220/33 kV, 3-Phase Transformer at Biharshariff Sub-station and 1 No. 315 MVA, 400/220/33 kV, 3-Phase Transformer at Jamshedpur Sub-station, Asset-2: 1 No. 80 MVAR, 420 kV, 3-Phase Reactor at Rourkela Sub-station, Asset-3: 1 No. 315 MVA, 400/220 kV, 3-Phase ICT at Durgapur Sub-station, Order in Petition No.76/TT/2020 Page 3 of 54 Asset-4: 1 No. 160 MVA, 220/132 kV, 3-Phase ICT at Siliguri Sub-station, Asset-5: 1 No. 315 MVA, 400/220 kV, 3-Phase ICT at Rourkela Sub-station, Asset-6: 1 No. 50 MVA, 132/66 kV, 3-Phase ICT at Gangtok Sub-station

2. The Petitioner has made the following prayers in this petition:- (1) Approve the trued up Transmission Tariff for 2014-19 block and transmission tariff for 2019-24 block for the assets covered under this petition, as per para 9.1 and 10.0 above. (2) Approve the Completion cost and additional capitalization incurred during 2014-19. (3) Allow the petitioner to recover the shortfall or refund the excess Annual Fixed Charges, on account of Return on Equity due to change in applicable Minimum Alternate/Corporate Income Tax rate as per the Income Tax Act, 1961 (as amended from time to time) of the respective financial year directly without making any application before the Commission as provided in Tariff Regulation 2014 and Tariff regulations 2019 as per para 9.1 and 10.0 above for respective block. (4) Approve the reimbursement of expenditure by the beneficiaries towards petition filing fee, and expenditure on publishing of notices in newspapers in terms of Regulation 70 (1) Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2019, and other expenditure (if any) in relation to the filing of petition. (5) Allow the petitioner to bill and recover Licensee fee and RLDC fees and charges, separately from the respondents in terms of Regulation 70 (3) and (4) Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2019. (6) Allow the petitioner to bill and adjust impact on Interest on Loan due to change in Interest rate on account of floating rate of interest applicable during 2019-24 period, if any, from the respondents. (7) Allow the petitioner to claim the capital spares at the end of tariff block as per actual. (8) Allow the petitioner to claimed initial spares project as whole. (9) Allow the petitioner to file a separate petition before Honble Commission for claiming the overall security expenses and consequential IOWC on that security expenses as mentioned at para 10.6 above. (10) Allow the Petitioner to bill and recover GST on Transmission Charges separately from the respondents, if GST on transmission is levied at any rate in future. Further, any taxes including GST and duties including cess etc. imposed by any statutory/Govt./municipal authorities shall be allowed to be recovered from the beneficiaries. and pass such other relief as Honble Commission deems fit and appropriate under the circumstances of the case and in the interest of justice. Order in Petition No.76/TT/2020 Page 4 of 54 Background

3. The brief facts of the case are as under: (a) The Investment Approval (IA) for the transmission scheme was accorded by the Board of Directors of the Petitioner vide Letter no. C/CP/Spare ICTs and Reactors dated 4.8.2011 for 7777 lakh including an IDC of 210 lakh, based on 1st Quarter, 2011 price level. (b) The transmission tariff of Asset-1 to 5 and of 1 No. 160 MVA, 220/132 kV, 3- Phase ICT at Baripada Sub-station (Shifted to Purnea Sub-Station) from COD to 31.3.2014 was determined vide order dated 10.7.2015 in Petition No. 43/TT/2013 and the tariff for Asset-6 from COD to 31.3.2019 was determined vide order dated 25.4.2016 in Petition No. 215/TT/2015. Further, vide order dated 17.10.2017 in Petition No. 37/TT/2017, the tariff allowed in respect of Asset-1 to 5 vide order dated 10.7.2015 in Petition No. 43/TT/2013 was trued-up and tariff for the Combined Asset-A (Assets-1 to 5) for the 2014-19 tariff period was determined. In the order dated 17.10.2017 in Petition No. 37/TT/2017, the Petitioner was directed to file a separate petition claiming tariff for 1 No. 160 MVA, 220/132 kV, 3-Phase ICT at Baripada Sub-station (Shifted to Purnea Sub- Station) after de-capitalisation of old replaced assets. Accordingly, the Petitioner filed Petition No. 322/TT/2019. The Commission vide order dated 29.1.2020 in Petition No. 322/TT/2019 trued-up the transmission tariff allowed in respect of 1 No. 160 MVA, 220/132kV, 3-Phase ICT at Baripada Sub-station (Shifted to Purnea Sub-Station) allowed vide order dated 10.7.2015 in Petition No. 43/TT/2013 and approved the tariff for 2014-19 period. Order in Petition No.76/TT/2020 Page 5 of 54 (c) The scope of the transmission scheme under Provision of Spare ICTs and Reactors for Eastern, Northern, Southern and Western Regions in Eastern Region is as under: Transmission Elements:

(i) 1 No. 315 MVA, 400/220/33 kV, 3-Phase Transformers at Biharshariff Sub-station and 1 No. 315 MVA, 400/220/33, kV 3-Phase Transformers at Jamshedpur Sub-station

(ii) 1 No. 80 MVAR, 420 kV, 3-Phase Reactor at Rourkela Sub- station

(iii) 1 No. 160 MVA, 220/132kV, 3-Phase ICT at Baripada Sub- station (Shifted to Purnea Sub-Station)

(iv) 1 No. 315 MVA, 400/220 kV, 3-Phase ICT at Durgapur Sub- station

(v) 1 No. 160 MVA, 220/132 kV, 3-Phase ICT at Siliguri Sub-station

(vi) 1 No. 315 MVA, 400/220 kV, 3-Phase ICT at Rourkela Sub- station

(vii) 1 No. 50 MVA, 132/66 kV, 3-Phase ICT at Gangtok Sub-station (d) The entire scope of the transmission scheme under Provision of Spare ICTs and Reactors for Eastern, Northern, Southern and Western Regions in Eastern Region except for 1 No. 160 MVA, 220/132 kV, 3-Phase ICT at Baripada Sub- station (Shifted to Purnea Sub-Station) are covered in the instant petition. (e) The details of commercial operation along with time over-run of the assets covered in the instant petition are as under: Asset SCOD COD Time over-run Asset-1 1.1.2013 1.7.2012 (actual COD) 1.9.2012 (tariff COD) Asset-2 1.10.2012 Nil Asset-3 1.3.2013 2 months Asset-4 1.6.2013 5 months Asset-5 1.4.2013 3 months Asset-6 (Referred to as Asset-B hereinafter) 20.4.2015 27 months and 18 days Order in Petition No.76/TT/2020 Page 6 of 54 (f) The transmission tariff approved in respect of the Combined Asset-A (Assets-1 to 5) approved vide order dated 17.10.2017 in Petition No. 37/TT/2017 and in respect of Asset-6 approved vide order dated 25.4.2016 in Petition No. 215/TT/2015 and the trued-up tariff claimed by the Petitioner in the instant petition are as under: Asset Tariff 2014-15 2015-16 2016-17 2017-18 2018-19 Combined Asset-A Annual Fixed Charges approved vide order dated 17.10.2017 in Petition No. 37/TT/2017 883.00 891.70 889.31 871.63 844.35 AFC claimed by the Petitioner based on truing up in the instant Petition 885.15 904.99 906.67 881.67 862.92 Asset-B Annual Fixed Charges approved vide order dated 25.4.2016 in Petition No. 215/TT/2015 0.00 45.38 80.19 77.80 75.43 AFC claimed by the Petitioner based on truing up in the instant Petition 0.00 40.04 72.06 72.07 71.21

4. The nomenclature of the assets used by the Petitioner in the instant petition is different form the nomenclature used in the earlier petitions. The details are as under: Name of asset in order dated 10.7.2015 in Petition No. 43/TT/2013 Name of Asset in the instant Petition Actual COD Remarks Asset-A Asset-1: 1 No. 315 MVA, 400/220/33 kV, 3-Phase Transformer at Biharsharif Sub- station and 1 No. 315 MVA, 400/220/33 kV, 3-Phase Transformer at Jamshedpur Sub- station 1.7.2012 (actual COD) 1.9.2012 (tariff COD) Covered in the order dated 10.7.2015 in Petition No. 43/TT/2013 for 2009-14 tariff period; order dated 17.10.2017 in Petition No. 37/TT/2017 for 2014-19 tariff period Asset-B Asset-2: 1 No. 80 MVAR, 420 kV, 3-Phase Reactor at Rourkela Sub- station 1.10.2012 Asset-D Asset-3: 1 No. 315 MVA, 400/220 kV, 3-Phase ICT at Durgapur Sub- station 1.3.2013 Order in Petition No.76/TT/2020 Page 7 of 54 Asset-E Asset-4: 1 No. 160 MVA, 220/132 kV, 3-Phase ICT at Siliguri Sub- station 1.6.2013 Asset-F Asset-5: 1 No. 315 MVA, 400/220 kV, 3-Phase ICT at Rourkela Sub- station, 1.4.2013 Asset-G Asset-B (or Asset-6): 1 No. 50 MVA, 132/66 kV, 3-Phase ICT at Gangtok Sub-station 20.4.2015 Covered in the order dated 25.4.2016 in Petition No. 215/TT/2015 for 2014-19 tariff period Asset-C (Not covered in the instant petition)

1 No. 160 MVA, 220/132kV, 3- Phase ICT at Baripada Sub-station (Shifted to Purnea Sub-Station) 1.9.2013 Covered in the order dated 10.7.2015 in Petition No. 43/TT/2013 for 2009-14 tariff period; order dated 29.1.2020 in Petition No. 322/TT/2019 for 2014-19 tariff period

5. The Respondents are power departments and distribution and transmission licensees, who are procuring transmission services from the Petitioner, mainly beneficiaries of the Eastern Region.

6. The Petitioner has served the petition on the Respondents and notice regarding filing of this petition has also been published in the newspapers in accordance with Section 64 of the Electricity Act, 2003. No comments or suggestions have been received from the general public in response to the aforesaid notices published in the newspapers by the Petitioner. Bihar State Power Holding Company Limited (BSPHCL), i.e. the Respondent No.1 has filed its reply vide affidavit dated 3.3.2020 and has raised issues of Initial Spares, Additional Capital Expenditure (ACE), Interest on Loan (IoL) and Return on Equity (RoE). The Petitioner vide affidavit dated 22.5.2020 has filed rejoinder to the reply of BSPHCL. The issues raised by BSPHCL and the clarifications given by the Petitioner are considered in the relevant portion of the instant order. Order in Petition No.76/TT/2020 Page 8 of 54

7. This order is issued considering the submissions made by the Petitioner in the petition dated 30.10.2019, Petitioners affidavits dated 25.2.2020, 13.3.2020 and 5.6.2020; BSPHCLs reply affidavit dated 3.3.2020; and the Petitioners rejoinder dated 22.5.2020 to the reply of BSPHCL.

8. The hearing in this matter was held on 22.5.2020 through video conference and the order was reserved. The Petitioner was also directed to submit certain information and the same has been filed by the Petitioner vide affidavit dated 5.6.2020.

9. Having heard the representatives of the Petitioner and the Respondent and having perused the material on record, we proceed to dispose of the petition. TRUING-UP OF ANNUAL FIXED CHARGES FOR THE 2014-19 TARIFF PERIOD

10. The details of the trued up transmission charges claimed by the Petitioner for the 2014-19 tariff period for the transmission assets are as under: ( in lakh) Combined Asset-A Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 Depreciation 274.23 287.88 296.81 298.02 300.40 Interest on Loan 287.41 276.47 259.35 232.34 208.07 Return on Equity 303.59 320.28 330.11 331.47 335.03 Interest on working capital 19.92 20.36 20.40 19.84 19.42 O&M Expenses 0.00 0.00 0.00 0.00 0.00 Total 885.15 904.99 906.67 881.67 862.92 ( in lakh) Asset-B Particulars 2015-16 (Pro-rata for 347 days) 2016-17 2017-18 2018-19 Depreciation 11.63 21.59 22.89 23.41 Interest on Loan 14.51 24.72 21.98 19.97 Return on Equity 13.00 24.13 25.58 26.23 Interest on working capital 0.90 1.62 1.62 1.60 O&M Expenses 0.00 0.00 0.00 0.00 Total 40.04 72.06 72.07 71.21 Order in Petition No.76/TT/2020 Page 9 of 54

11. The details of the trued up Interest on Working Capital (IWC) claimed by the Petitioner for the 2014-19 tariff period for the transmission assets are as under: ( in lakh) Combined Asset-A Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 O & M Expenses 0.00 0.00 0.00 0.00 0.00 Maintenance Spares 0.00 0.00 0.00 0.00 0.00 Receivables 147.53 150.83 151.11 146.95 143.82 Total Working Capital 147.53 150.83 151.11 146.95 143.82 Rate of Interest (%) 13.50 13.50 13.50 13.50 13.50 Interest on working capital 19.92 20.36 20.40 19.84 19.42 ( in lakh) Asset-B Particulars 2015-16 (Pro-rata for

347 days) 2016-17 2017-18 2018-19 O & M Expenses 0.00 0.00 0.00 0.00 Maintenance Spares 0.00 0.00 0.00 0.00 Receivables 7.04 12.01 12.01 11.87 Total Working Capital 7.04 12.01 12.01 11.87 Rate of Interest (%) 13.50 13.50 13.50 13.50 Interest on Working Capital 0.90 1.62 1.62 1.60 Capital Cost

12. The Commission vide order dated 17.10.2017 in Petition No. 37/TT/2017 had allowed the capital cost of 5043.95 lakh for Combined Asset-A and vide order dated 25.4.2016 in Petition No. 215/TT/2015 had allowed the capital cost of 78.45 lakh as on COD for Asset-B. The details are as under: ( in lakh) Asset Apportioned Approved Capital Cost as per FR Expenditure up to 31.3.2014/ Additional Capital Expenditure (ACE) Total Capital Cost as on 31.3.2019 2014-15 2015-16 2016-17 Combined Asset-A 6438.04 5043.95 224.99 162.94 106.92 5538.8 Asset-B 471.65 78.45 0.00 370.30 0.00 448.75 Total 6909.69 5122.40 224.99 533.24 106.92 5987.55

13. The Petitioner vide Auditors Certificates dated 23.5.2019, 31.7.2019 and 13.7.2019 submitted the capital cost incurred upto 31.3.2014/COD and ACE upto Order in Petition No.76/TT/2020 Page 10 of 54 31.3.2019 in respect of Combined Asset-A and Asset-B respectively. The details of apportioned approved capital cost, capital cost as on 31.3.2014/COD, and ACE incurred upto 31.3.2019 as claimed by the Petitioner for the Combined Asset-A and Asset-B are as follows: ( in lakh) Asset Name Approved Capital Cost As per FR Exp. Up to 31.3.2014 (As per Auditors Certificate) Exp. Up to 31.3.2014 (after adjusting deductible spares) Total completion Cost as on 31.3.2019 2014- 2015- 2016- 2017- 2018- Combined Asset-A 6438.04 5044.02 5081.16* 224.99 292.32 45.94 0.00 90.00 5734.41 Asset-B 471.65 78.45 78.45 0.00 307.91 44.96 4.28 15.37 450.97 Total 6909.69 5119.47 5159.61 224.99 600.23 90.90 4.28 105.37 6185.38 *(5044.02 + 80.93 43.79) lakh = 5081.16 lakh where 80.93 lakh is the amount of Initial Spares disallowed and 43.79 lakh is amount of Initial Spares deductible

14. The completion cost including ACE claimed by the Petitioner for the transmission assets is within the FR approved cost as mentioned above. Time Over-run

15. The scheduled date of commercial operation (SCOD) of the assets (Assets-1 to 5) which form part of Combined Asset-A was 1.1.2013. There was no time over-run for Asset-1 and Asset-2. The time over-run in Asset-3, Asset-4 and Asset-5 was not condoned by the Commission vide order dated 10.7.2015 in Petition No. 43/TT/2013. Asset-B was put under commercial operation on 20.4.2015 and time over-run of 27 months and 18 days was condoned by the Commission vide order dated 25.4.2016 in Petition No. 215/TT/2015. Interest During Construction (IDC) and Incidental Expenditure During Construction (IEDC)

16. IDC and IEDC claimed by the Petitioner in case of Combined Asset-A (Asset-1 to 5) was dealt in true-up order dated 17.10.2017 in Petition No.37/TT/2017. IDC and Order in Petition No.76/TT/2020 Page 11 of 54 IEDC of the respective assets have already been discharged during the 2009-14 tariff period.

17. In respect of Asset-B, the Petitioner has claimed IDC and has submitted Auditors Certificates in support of the same. The Petitioner has submitted the computation of IDC along with year-wise details of the IDC discharged. The Petitioner in its reply dated 25.2.2020 has submitted the IDC discharge statement showing details of accrued IDC discharged upto COD, IDC discharged after COD and during the 2014-15 period.

18. We have considered the submissions made by the Petitioner. The allowable IDC has been worked out considering the information submitted by the Petitioner for Asset-B on cash basis. The loan details submitted in Form-9C for the 2014-19 tariff period and the IDC computation sheet have been considered for the purpose of IDC calculation on cash and accrued basis. The un-discharged IDC as on COD has been considered as ACE during the year in which it has been discharged. Accordingly, based on the information furnished by the Petitioner, IDC considered is summarized as under: ( in lakh) Assets IDC as per Auditors Certificate Admissible Computational difference IDC dis- charged as on IDC Un- discharged as on COD IDC Dis- charged during 2015-16 A B C D=B-C E F=C-E G Asset-B 6.57 6.57 0 6.27 0.30 0.30

19. The Petitioner has claimed an IEDC of 10.58 lakh in respect of Asset-B and has submitted Auditors certificate in support of the same. The Petitioner has also submitted that the entire IEDC has been discharged as on COD. IEDC claimed is Order in Petition No.76/TT/2020 Page 12 of 54 within the estimated expenditure of IEDC as indicated in the Abstract Cost Estimate. Hence, IEDC claimed has been allowed. Initial Spares

20. The Petitioner has claimed the following Initial Spares for the transmission assets and prayed to revise the Initial Spares allowed earlier in light of the judgement of the Appellate Tribunal for Electricity (APTEL) dated 14.9.2019 in Appeal No.74 of 2017: Asset Estimated Completion Cost (A) ( in lakh) Initial Spares claimed originally (B) ( in lakh) Initial Spares worked out at Ceiling Limit 2.5% ( in lakh) C = (A-B)x2.5(100-2.5) Asset-A1 2264.79 127.86 54.79 Asset-A2 453.47 10.83 11.35 Asset-C* 625.39 13.72 15.68 Asset-A3 1111.12 26.6 27.81 Asset-A4 662.65 13.72 16.64 Asset-A5 1286.17 26.60 32.30 Asset-B 450.97 10.08 28.14 Total 6837.41 229.41 185.62 Excess Spares claimed (B-C) 43.79 *Under subject project but not part of instant petition.

21. BSPHCL has submitted that the order dated 17.10.2017 in Petition No. 37/TT/2017 does not cover Asset-B and Spare ICT at Purnea (Asset-C) and further details of Asset-C has not been provided in the instant petition to substantiate the benefit claimed. In response, the Petitioner has submitted that the Spare ICT at Purnea i.e. Asset-C is not part of the instant petition but is a part of the subject project and, therefore, same has been considered in the instant petition to arrive at the allowable Initial Spares amount considering the project as a whole.

22. We have considered the submissions of the Petitioner and BSPHCL. APTEL vide its judgement dated 14.9.2019 in Appeal No. 74 of 2017 observed that the Order in Petition No.76/TT/2020 Page 13 of 54 Commission for the purpose of prudence check may restrict the Initial Spares to the cost of the individual asset and later at the time of truing-up allow Initial Spares as per the ceiling limit on the overall project cost. The relevant portion of the said judgement is extracted here under: 18.13. We do not agree with this methodology of restricting initial spares asset / element wise as adopted by the Central Commission. The Central Commission to have a prudence check on the initial spares, being restricted based on the individual asset wise cost initially, but subsequently ought to have allowed as per the ceiling limits on the overall project cost basis during the true- up.

23. The assets included in Combined Asset-A (Asset-1 to 5) were put into commercial operation in the 2009-14 period whereas Asset-B was put under commercial operation in the 2014-19 tariff period. Accordingly, the norms specified for the Initial Spares in the 2014 Tariff Regulations and the 2009 Tariff Regulations are applicable for computation of the allowable Initial Spares asset/element wise. As per APTELs judgement, the Initial Spares are to be allowed as a percentage of the overall project cost at the time of truing up. In the present case, though the instant assets were put into commercial operation during the 2009-14 and the 2014-19 tariff periods, the overall project cost of the instant transmission assets is arrived at only when all of them are combined while claiming the tariff for the 2019-24 tariff period. Further, the Petitioner has not included Asset-C (Spare ICT at Purnea Sub-station) in the instant petition. Therefore, the Initial Spares are trued up on the basis of the cost of the individual assets in the 2014-19 tariff period and the Initial Spares are allowed on the basis of the overall project cost in the 2019-24 period when the instant assets are combined and the overall project cost is arrived at. Accordingly, the details of Initial Spares allowed for the 2014-19 tariff period are as under: Order in Petition No.76/TT/2020 Page 14 of 54 Assets put under the commercial operation during 2009-14 Tariff Period: Assets Project cost upto cut- off date ( in lakh) Initial Spares claimed ( in lakh) Norms as per the 2009 Tariff Regulations Initial Spares as per the norms of the 2009 Tariff Regulations ( in lakh) Initial Spares already allowed ( in lakh) Initial Spares disallowed ( in lakh) Additional Initial Spares to be allowed ( in lakh) Asset-1 2264.79 127.86 2.5 54.79 54.79 73.07 0.00 Asset-2 439.01 10.83 2.5 10.98 10.83 0 0.15 Asset-3 1009.76 26.60 2.5 25.21 23.94 2.66 1.27 Asset-4 627.33 13.72 2.5 15.73 10.91 2.81 2.81 Asset-5 1005.04 26.60 2.5 25.09 23.94 2.66 1.15 Assets put under the commercial operation during 2014-19 tariff period: Asset Plant & Machinery cost upto cut- off date (excluding IDC and IEDC) ( in lakh) Initial Spares claimed ( in lakh) Norms as per the 2014 Tariff Regulations Initial Spares as per the norms of the 2014 Tariff Regulations ( in lakh) Initial Spares allowed ( in lakh) Initial Spares discharged ( in lakh) 2015- Asset-B 433.82 10.08 6 46.64 10.08 9.07 1.01

24. As regards the additional Initial Spares claimed in respect of Combined Asset- A (Assets-1 to 5), we have also perused the tariff forms for the 2004-19 tariff period submitted by the Petitioner. It is observed that the Petitioner has claimed depreciation of the gross block considering the additional Initial Spares whereas RoE and IoL have been claimed on the capital cost without considering the additional Initial Spares. Therefore, we are unable to consider the Petitioners claim for truing up of Initial Spares in this petition and tariff for the 2014-19 period is being trued up without considering the additional claim of Initial Spares by the Petitioner. The Petitioner is at liberty to claim additional Initial Spares at the time of truing up of tariff for the 2019-24 period. Order in Petition No.76/TT/2020 Page 15 of 54 Additional Capital Expenditure (ACE)

25. The Commission had allowed ACE of 494.85 lakh for Combined Asset-A for the 2014-19 tariff period vide order dated 17.10.2017 in Petition No. 37/TT/2017. Further, vide order dated 25.4.2016 in Petition No. 215/TT/2015, the Commission allowed ACE of 370.30 lakh for Asset-B for the 2014-19 tariff period.

26. The Petitioner has claimed the following ACE for the Combined Asset-A and Asset-B and has submitted the Auditors Certificate in support of the same: ( in lakh) Asset Additional Capital Expenditure (ACE) (Claimed) 2014-15 2015-16 2016-17 2017-18 2018-19 A1 0.00 0.00 0.00 0.00 0.00 A2 14.46 0.00 0.00 0.00 0.00 A3 15.60 0.00 37.15 0.00 65.00 A4 187.42 11.19 0.00 0.00 25.00 A5 7.51 281.13 8.79* 0.00 0.00 Combined Asset-A (A1+A2+A3+A4+A5) 224.99 292.32 45.94 0.00 90.00 Asset-B 0.00 307.91 44.96 4.28 15.37 Total (Combined Asset- A+ Asset-B) 224.99 600.23 90.90 4.28 105.37 *LD recovered to the extent of IDC and IEDC disallowed of 8.79 lakh has been added back to capital cost in 2016-17

27. In order dated 25.4.2016 in Petition No. 215/TT/2015, the Petitioner was directed to submit the amount of Liquidated Damage (LD) and insurance realised in respect of Asset-B along with financial implication at the time of truing-up. In this regard, the Petitioner has submitted that LD amounting to 1.75 lakh has been levied on the contractor and the capital cost of Asset-B has been arrived after deducting the LD recovered.

28. BSPHCL has submitted that the Petitioner has not provided any details of the insurance realized. In response, the Petitioner has submitted that Asset-B was damaged during transit (being undertaken by supplier) before reaching the Gangtok Order in Petition No.76/TT/2020 Page 16 of 54 Sub-station and the same was covered under the transit insurance. The transit insurance being a bilateral issue between the supplier and the insurance company, any proceeds received against transit damages are retained by the supplier. Therefore, recovery from insurance will not have any implication on the capital cost of the asset.

29. The Petitioner has submitted that ACE incurred in the assets covered in the instant petition is on account of un-discharged liability towards final payment/ withheld payment due to contractual exigencies for work executed within the cut-off date. Further, ACE within the cut-off date has been claimed under Regulation 14(1)(i) and 14(1)(ii) of the 2014 Tariff Regulations whereas the same beyond cut-off date has been claimed under Regulation 14(3)(v) of the 2014 Tariff Regulations. The Petitioner vide replies dated 13.3.2020 and 5.6.2020 has submitted the details of party-wise expenditure for the assets before and after the cut-off date as under: ( in lakh) Asset Party Year Year- wise actual add-cap (2014-19) Original liability discharged liability as on COD/ Yearend discharged liability as 31.3.2019 Asset- SIEMENS Sub-station Package 2014-15 14.46 14.46 - - Asset- Sub-station Package 2014-15 15.60 117.75 102.15 - 2015-16 0 102.15 102.15 - 2016-17 37.15 102.15 65.00 - 2017-18 0 65.00 65.00 - 2018-19 65.00 65.00 0 0 Asset- Sub-station Package 2014-15 187.42 109.69 36.19 - 2015-16 11.19 36.19 25.00 - 2016-17 0 25.00 25.00 - 2017-18 0 25.00 25.00 - 2018-19 25.00 25.00 0 0 Asset- GE T&D India Limited Sub-station Package 2014-15 7.51 297.43 281.13 - 2015-16 281.13 289.92 0 0 2016-17 8.79 8.79 0 0 Asset- CGL 2015-16 307.61 173.52 64.61 - Order in Petition No.76/TT/2020 Page 17 of 54 Asset Party Year Year- wise actual add-cap (2014-19) Original liability discharged liability as on COD/ Yearend discharged liability as 31.3.2019 B Sub-station Package 2016-17 44.96 64.61 19.65 - 2017-18 4.28 19.65 15.37 - 2018-19 15.37 15.37 0 0

30. BSPHCL has submitted that ACE for the assets have been incurred without the prior approval of the Commission and these expenses do not qualify as expenses due to uncontrollable factors. BSPHCL has further submitted that ACE towards the instant assets have been substantially lower than that was approved earlier and the Petitioner by getting approval of higher ACE gets the benefit of lower applicable interest rate as compared to interest on loan paid by beneficiaries. The overall impact of approval of transmission tariff, considering higher ACE, results in payment of additional interest amount by the beneficiary.

31. In response, the Petitioner has submitted that ACE approved by the Commission was based on projections and while projecting the estimated ACE, contracts were not closed and liabilities had not been finalized. However, in the instant petition, ACE is claimed on the basis of actual payments made to the contractor after receipt of final invoices and incorporating the amendments which may happen to be higher or lower than the estimated ACE.

32. We have considered the submissions made by the Petitioner and BSPHCL. It is observed that the actual audited ACE claimed by the Petitioner is on account of balance and retention payment for works executed within the cut-off date, accrued IDC discharged in 2014-15, un-discharged spares and unexecuted/ balance works. The same has been considered for computation of total capital cost as on 31.3.2019. ACE claimed for the period up to cut-off date is allowed under Regulation 14(1)(i) and Order in Petition No.76/TT/2020 Page 18 of 54 14(1)(ii) of the 2014 Tariff Regulations whereas ACE claimed for the period beyond cut-off date is allowed Regulation 14(3)(v) of the 2014 Tariff Regulations. It is also noted that the Petitioner has recovered LD of 9.75 lakh and 1.75 lakh from the contractor in respect of Asset-5 and Asset-B respectively. We have verified the Petitioners claim and treatment of LD from the Auditor Certificates. The Petitioners Auditor, in its certificates, in respect of the Asset-5, has certified that LD of 9.75 lakh was recovered from the contractor(s) and the same was reduced from the capital cost of Asset-5 in 2016-17. Further, LD recovered to the extent of IDC and IEDC disallowed, i.e., 8.79 lakh has been added back to the capital cost of Asset-5 during 2016-17. In case of Asset-B, the time over-run was condoned by the Commission. Therefore, the Petitioner has deducted LD of 1.75 lakh to arrive at the capital cost of Asset-B. The Appellate Tribunal for Electricity (APTEL) in judgement dated 27.4.2011 in Appeal No. 72 of 2010 held that the generator or the transmission service provider is entitled to retain LD in case the time over-run is not condoned. The relevant portion of the order dated 27.4.2011 is extracted hereunder: 7.4. The delay in execution of a generating project could occur due to following reasons:

i) due to factors entirely attributable to the generating company, e.g., imprudence in selecting the contractors/suppliers and in executing contractual agreements including terms and conditions of the contracts, delay in award of contracts, delay in providing inputs like making land available to the contractors, delay in payments to contractors/suppliers as per the terms of contract, mismanagement of finances, slackness in project management like improper co-ordination between the various contractors, etc. ii) due to factors beyond the control of the generating company e.g. delay caused due to force majeure like natural calamity or any other reasons which clearly establish, beyond any doubt, that there has been no imprudence on the part of the generating company in executing the project. iii) situation not covered by (i) & (ii) above. In our opinion in the first case the entire cost due to time over run has to be borne by the generating company. However, the Liquidated Damages (LDs) and insurance proceeds on account of delay, if any, received by the generating company could be retained by the generating company. In the second case the generating company could be given benefit of the additional cost incurred due to time over-run. However, the Order in Petition No.76/TT/2020 Page 19 of 54 consumers should get full benefit of the LDs recovered from the contractors/suppliers of the generating company and the insurance proceeds, if any, to reduce the capital cost. In the third case the additional cost due to time over-run including the LDs and insurance proceeds could be shared between the generating company and the consumer. It would also be prudent to consider the delay with respect to some benchmarks rather than depending on the provisions of the contract between the generating company and its contractors/suppliers. If the time schedule is taken as per the terms of the contract, this may result in imprudent time schedule not in accordance with good industry practices.

33. In view of the APTELs judgement dated 27.4.2011 in Appeal No. 72 of 2010, the Petitioner is entitled to retain LD in such cases wherein the time over-run is not condoned. Accordingly, the Petitioner is allowed to retain LD of 8.79 lakh in respect of Asset-5 as the time over-run in respect of said asset was not condoned by the Commission vide order dated 10.7.2015 in Petition No. 43/TT/2013 as shown below after making necessary adjustments in ACE during 2016-17.

34. The details of ACE allowed is as follows: ( in lakh) Asset Capital Cost as 31.3.2014 / COD Additional Capital Expenditure (ACE) Total Capital Cost as on 31.3.2019 2014-15 2015-16 2016-17 2017-18 2018-19 Combined Asset-A 5043.95 224.99 292.32 45.94 0.00 90.00 5697.20 Asset-B 78.45 0.00 307.91 44.96 4.28 15.37 450.97 Total 5122.40 224.99 600.23 90.90 4.28 105.37 6148.17 ( in lakh) Combined Asset-A Capital Cost as on 31.3.2014 Additional Capital Expenditure (ACE) Total Capital Cost as on 31.3.2019 2014-15 2015-16 2016-17 2018-19 Approved vide orders dated 17.10.2017 5043.95 224.99 162.94 106.92 0.00 5538.80 As claimed by the Petitioner in the instant petition 5081.16 224.99 292.32 45.94 90.00 5734.41 Allowed after true-up in this order 5043.95 224.99 292.32 45.94 90.00 5697.20 ( in lakh) Order in Petition No.76/TT/2020 Page 20 of 54 Asset-B Capital Cost as on COD Additional Capital Expenditure (ACE) Total Capital Cost as on 31.3.2019 2015- 2016- 2017- 2018- Approved vide orders dated 25.4.2016 78.45 370.30 0.00 0.00 0.00 448.75 As claimed by the Petitioner in the instant petition 78.45 307.91 44.96 4.28 15.37 450.97 Allowed after true-up in this order 78.45 307.91 44.96 4.28 15.37 450.97 Debt-Equity Ratio

35. The Petitioner has considered debt-equity ratio as 70:30 as on 31.3.2014 and for ACE during the 2014-19 period. The debt-equity ratio of 70:30 has been considered for capital cost as on 31.3.2014 and ACE during the 2014-19 tariff period as provided under Regulation 19 of the 2014 Tariff Regulations. The details of the debt-equity as on the COD and 31.3.2019 considered for the purpose of tariff computation for the 2014-19 tariff period are as under: Combined Asset-A Capital Cost as on Capital Cost as on 31.3.2019 Amount ( in lakh) (%) Amount ( in lakh) Debt 3530.70 70.00 3988.06 70.00 Equity 1513.18 30.00 1709.14 30.00 Total 5043.95 100.00 5697.20 100.00 Asset-B Capital Cost as on Capital Cost as on 31.3.2019 Amount ( in lakh) (%) Amount ( in lakh) Debt 55.12 70.26 315.89 70.05 Equity 23.33 29.74 135.08 29.95 Total 78.45 100.00 450.97 100.00 Interest on Loan (IoL)

36. The Petitioner has considered the weighted average rate of IoL on the basis of prevailing rates as on 1.4.2014 for respective loans. The Petitioner has submitted that the weighted average rate of IoL has been considered on the basis of rates prevailing Order in Petition No.76/TT/2020 Page 21 of 54 as on 1.4.2014 and has prayed to consider floating rate of interest applicable during the 2014-19 period, if any, during the truing-up of tariff.

37. BSPHCL has submitted that as per the order dated 17.10.2017 in Petition No. 37/TT/2017, any change in rate of interest subsequent to the date of commercial operation will be considered at the time of truing-up, hence, the change in interest rate due to floating rate of interest applicable, if any, cannot be claimed over the tariff period of five years directly from the beneficiaries. In response, the Petitioner has submitted that for the 2014-19 tariff period, IoL has been calculated on the basis of actual rate of interest of various loans deployed for each year as per direction given in the order dated 17.10.2017 in Petition No. 37/TT/2017. Further, in the tariff calculation for the 2019-24 period, IoL has been calculated on the basis of interest rates prevailing as on 1.4.2019 for respective loans.

38. We have considered the submissions made by the Petitioner and BSPHCL. The IoL is allowed based on actual interest rate in accordance with Regulation 26 of the 2014 Tariff Regulations. The interest on loan has been worked out as under:

(i) Gross amount of loan, repayment of instalments and weighted average rate of interest on actual average loan have been considered as per the petition.

(ii) The repayment for the tariff period 2014-19 has been considered to be equal to the depreciation allowed for that period.

39. The details of IoL allowed are as under: ( in lakh) Combined Asset-A Particular 2014-15 2015-16 2016-17 2017-18 2018-19 Gross Normative Loan 3530.77 3688.26 3892.89 3925.06 3925.06 Cumulative Repayments upto Previous Year 307.57 579.83 865.75 1160.59 1456.66 Net Loan-Opening 3223.20 3108.43 3027.14 2764.46 2468.40 Additions 157.49 204.62 32.17 0.00 63.00 Order in Petition No.76/TT/2020 Page 22 of 54 Combined Asset-A Particular 2014-15 2015-16 2016-17 2017-18 2018-19 Repayment during the year 272.26 285.92 294.85 296.06 298.44 Net Loan-Closing 3108.43 3027.14 2764.46 2468.40 2232.97 Average Loan 3165.82 3067.79 2895.80 2616.43 2350.68 Weighted Average Rate of Interest on Loan (%) 9.081 9.020 8.971 8.903 8.885 Interest on Loan 287.50 276.72 259.79 232.95 208.85 ( in lakh) Asset-B Particular 2015-16 (Pro-rata for 347 days) 2016-17 2017-18 2018-19 Gross Normative Loan 55.12 270.66 302.13 305.13 Cumulative Repayments upto Previous Year 0.00 11.63 33.22 56.11 Net Loan-Opening 55.12 259.03 268.91 249.02 Additions due to Additional Capitalization 215.54 31.47 3.00 10.76 Repayment during the year 11.63 21.59 22.89 23.41 Net Loan-Closing 259.03 268.91 249.02 236.38 Average Loan 157.07 263.97 258.97 242.70 Weighted Average Rate of Interest on Loan (%) 9.738 9.363 8.488 8.230 Interest on Loan 14.50 24.72 21.98 19.97

40. IoL approved vide order dated 17.10.2017 in Petition No. 37/TT/2017, IoL claimed in the instant petition and trued-up IoL allowed in respect of Combined Asset- A is shown in the table below: ( in lakh) Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 Approved vide order dated 17.10.2017 in Petition No. 37/TT/2017 287.52 274.37 256.97 233.72 207.06 Claimed by the Petitioner in the instant petition 287.41 276.47 259.35 232.34 208.07 Approved after True-up in this order 287.50 276.72 259.79 232.95 208.85

41. IoL approved vide order dated 25.4.2016 in Petition No. 215/TT/2015, IoL claimed in the instant petition and trued-up IoL allowed in respect of Asset-B is as follows: Order in Petition No.76/TT/2020 Page 23 of 54 ( in lakh) Asset-B Particulars 2015-16 (Pro-rata for

347 days) 2016-17 2017-18 2018-19 Approved vide order dated 25.4.2016 in Petition No. 215/TT/2015 16.52 28.29 25.96 23.64 As claimed by the Petitioner in the instant Petition 14.51 24.72 21.98 19.97 Allowed after true-up in this order 14.50 24.72 21.98 19.97 Return on Equity (RoE)

42. The Petitioner has claimed RoE for the transmission assets in terms of Regulation 24 and 25 of the 2014 Tariff Regulations. The Petitioner has submitted that they are liable to pay income tax at MAT rates and has claimed the following effective tax rates for the 2014-19 tariff period: Year Claimed effective tax (in %) Grossed up ROE (Base Rate/1-t) (in %) 2014-15 21.018 19.624 2015-16 21.382 19.715 2016-17 21.338 19.704 2017-18 21.337 19.704 2018-19 21.549 19.757

43. As regards payment of Income Tax, BSPHCL has submitted that penalty, if any, arising on account of delay in deposit or short deposit of tax amount cannot be permitted to be claimed and the actual tax paid has to be duly adjusted for any refund of tax including interest received from the income tax authorities. BSPHCL has submitted that the grossed up rate of RoE has to be trued-up every financial year based on actual tax paid as stated in Regulations 25(3) of the 2014 Tariff Regulations. However, the basis considered for 2018-19, as stated in the petition, is the applicable rate and no reason has been given for non-filing of income tax return for 2018-19. BSPHCL has requested that differential tariff on this account may not be permitted to be claimed directly from the beneficiaries. In response, the Petitioner has submitted that the Income Tax assessment of the Petitioner has been completed and Order in Petition No.76/TT/2020 Page 24 of 54 Assessment Orders have been issued by the Income Tax Department in case of 2014-15, 2015-16 and 2016-17 and that the Income Tax returns have been filed with the Income Tax Department for the years 2017-18 and 2018-19. The Petitioner has submitted the copies of assessment order of 2014-15, 2015-16 and 2016-17 and has requested to allow for claiming the differential tariff on account of the trued up RoE based on effective tax rate calculated on completion of Income-tax assessment/re- assessment for the 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19 on receipt of the respective assessment orders, directly from the beneficiaries, on year to year basis as provided in the Regulation.

44. We have considered the submissions of the Petitioner and BSPHCL. It is observed that the Petitioner has filed the income tax returns and has complied with the provisions of Income Tax Act, 1961. RoE is allowed under Regulations 24 and 25 of the 2014 Tariff Regulations. The Commission has arrived at the effective tax rate for the Petitioner based on the notified MAT rates in order dated 27.4.2020 in Petition No. 274/TT/2019. The relevant portion of the order dated 27.4.2020 is as under:

26. We are conscious that the entities covered under MAT regime are paying Income Tax as per MAT rate notified for respective financial year under IT Act, 1961, which is levied on the book profit of the entity computed as per the Section 115JB of the IT Act, 1961. The Section 115JB(2) defines book profit as net profit in the statement of Profit & Loss prepared in accordance with Schedule-III of the Companies Act, 2013, subject to some additions and deductions as mentioned in the IT Act, 1961. Since the Petitioner has been paying income tax on income computed under Section 115JB of the IT Act, 1961 as per the MAT rates of the respective financial year, the notified MAT rate for respective financial year shall be considered as effective tax rate for the purpose of grossing up of RoE for truing up of the tariff of the 2014-19 tariff period in terms of the provisions of the 2014 Tariff Regulations. Interest imposed on any additional income tax demand as per the Assessment Order of the Income Tax authorities shall be considered on actual payment. However, penalty (for default on the part of the Assessee) if any imposed shall not be taken into account for the purpose of grossing up of rate of return on equity. Any under-recovery or over-recovery of grossed up rate on return on equity after truing up, shall be recovered or refunded to beneficiaries or the long term transmission customers/ DICs as the case may be on year to year basis.

27. Accordingly, following effective tax rates based on notified MAT rates are considered for the purpose of grossing up of rate of return on equity: Order in Petition No.76/TT/2020 Page 25 of 54 Year Notified MAT rates (inclusive of surcharge & cess) Effective tax (in %) 2014-15 20.961 20.961 2015-16 21.342 21.342 2016-17 21.342 21.342 2017-18 21.342 21.342 2018-19 21.549 21.549

45. The same MAT rates as considered in order dated 27.4.2020 in Petition No. 274/TT/2019 are considered for the purpose of grossing up of rate of RoE for truing- up of the tariff of the 2014-19 tariff period in terms of the provisions of the 2014 Tariff Regulations. Accordingly, the grossed up RoE rate is as follows: Year Notified MAT rates (inclusive of surcharge & cess) (In %) Base rate of (In %) Grossed up RoE [Base Rate/(1-t)] (In %) 2014-15 20.961 15.50 19.610 2015-16 21.342 15.50 19.705 2016-17 21.342 15.50 19.705 2017-18 21.342 15.50 19.705 2018-19 21.549 15.50 19.758

46. Accordingly, the trued up RoE allowed for the transmission assets for the 2014-19 tariff period is as under: ( in lakh) Combined Asset-A Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 Net Opening Equity 1513.18 1580.68 1668.37 1682.14 1682.14 Increase in Equity due to addition during the year 67.50 87.70 13.77 0.00 27.00 Closing Equity 1580.68 1668.37 1682.14 1682.14 1709.14 Average Equity 1546.93 1624.53 1675.26 1682.14 1695.64 Return on Equity (Base Rate) 15.500 15.500 15.500 15.500 15.500 Tax Rate applicable (%) 20.961 21.342 21.342 21.342 21.549 Applicable ROE Rate (%) 19.610 19.705 19.705 19.705 19.758 Return on Equity for the year 303.35 320.11 330.11 331.47 335.03 ( in lakh) Asset-B Particulars 2015-16 2016-17 2017-18 2018-19 Order in Petition No.76/TT/2020 Page 26 of 54 (Pro-rata for

347 days) Opening Equity 23.33 115.70 129.19 130.47 Addition due to Additional Capitalization 92.37 13.49 1.28 4.61 Closing Equity 115.70 129.19 130.47 135.08 Average Equity 69.52 122.44 129.83 132.77 Return on Equity (Base Rate) (%) 15.500 15.500 15.500 15.500 Tax Rate applicable (%) 21.342 21.342 21.342 21.549 Rate of Return on Equity (Pre-tax) (%) 19.705 19.705 19.705 19.758 Return on Equity (Pre-tax) 12.99 24.13 25.58 26.23

47. RoE approved vide order dated 17.10.2017 in Petition No. 37/TT/2017, RoE claimed in the instant petition and trued-up RoE allowed in respect of Combined Asset-A is shown in the table as follows: ( in lakh) Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 Approved vide order dated 17.10.2017 in Petition No. 37/TT/2017 303.35 314.76 322.70 325.85 325.85 Claimed by the Petitioner in the instant petition 303.59 320.28 330.11 331.47 335.03 Approved after true-up in this order 303.35 320.11 330.11 331.47 335.03

48. RoE approved vide order dated 25.4.2016 in Petition No. 215/TT/2015, RoE claimed in the instant petition and trued-up RoE allowed in respect of Asset-B is shown in the table below: ( in lakh) Asset-B Particulars 2015-16 (Pro-rata for

347 days) 2016-17 2017-18 2018-19 Approved vide order dated 25.4.2016 in Petition No. 215/TT/2015 14.70 26.40 26.40 26.40 As claimed by the Petitioner in the instant Petition 13.00 24.13 25.58 26.23 Allowed after true-up in this order 12.99 24.13 25.58 26.23 Order in Petition No.76/TT/2020 Page 27 of 54 Depreciation

49. The Petitioner has claimed depreciation considering gross block of 5081.16 lakh for Combined Asset-A, 78.45 lakh for Asset-B as on 31.3.2014 and ACE of 653.25 lakh and 372.52 lakh for Combined Asset-A and Asset-B respectively.

50. Depreciation has been computed considering capital expenditure as on 31.3.2014/ COD and ACE approved for the 2014-19 tariff period. The Gross Block during the 2014-19 tariff period has been depreciated at weighted average rate of depreciation (WAROD). WAROD has been worked out (Annexure-I) after taking into account the depreciation rates of assets as prescribed in the 2014 Tariff Regulations and depreciation allowed during the 2014-19 tariff period is as follows: ( in lakh) Combined Asset-A Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 Opening Gross Block 5043.95 5268.94 5561.26 5607.20 5607.20 Additional Capitalisation 224.99 292.32 45.94 0.00 90.00 Closing Gross Block 5268.94 5561.26 5607.20 5607.20 5697.20 Average Gross Block 5156.45 5415.10 5584.23 5607.20 5652.20 Rate of Depreciation (%) 5.28 5.28 5.28 5.28 5.28 Balance useful life (at the beginning of the year)

24 23 22 21 20 Aggregate Depreciable Value 4640.80 4873.59 5025.81 5046.48 5086.98 Depreciation during the year 272.26 285.92 294.85 296.06 298.44 Remaining Aggregate Depreciable Value 4060.97 4007.84 3865.21 3589.82 3331.89 ( in lakh) Asset-B Particulars 2015-16 (Pro-rata for 347 days) 2016-17 2017-18 2018-19 Opening Gross Block 78.45 386.36 431.32 435.60 Additional Capitalisation during the year 307.91 44.96 4.28 15.37 Closing Gross Block 386.36 431.32 435.60 450.97 Average Gross Block 232.41 408.84 433.46 443.29 Weighted average rate of Depreciation (WAROD) (%) 5.28 5.28 5.28 5.28 Order in Petition No.76/TT/2020 Page 28 of 54 Asset-B Particulars 2015-16 (Pro-rata for 347 days) 2016-17 2017-18 2018-19 Balance useful life of the asset at the beginning of the year

25 24 23 22 Aggregated Depreciable Value 209.16 367.96 390.11 398.96 Depreciation during the year 11.63 21.59 22.89 23.41 Remaining Aggregated Depreciable Value 197.53 334.74 334.01 319.44

51. Depreciation approved vide order dated 17.10.2017 in Petition No. 37/TT/2017, depreciation claimed in the instant petition and trued-up depreciation allowed in respect of Combined Asset-A is shown in the table below: ( in lakh) Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 Approved vide order dated 17.10.2017 in Petition No. 37/TT/2017 272.26 282.50 289.63 292.45 292.45 Claimed by the Petitioner in the instant petition 274.23 287.88 296.81 298.02 300.40 Approved after true-up in this order 272.26 285.92 294.85 296.06 298.44

52. Depreciation approved vide order dated 25.4.2016 in Petition No. 215/TT/2015, depreciation claimed in the instant petition and trued-up depreciation allowed in respect of Asset-B is shown in the table below: ( in lakh) Asset-B Particulars 2015-16 2016-17 2017-18 2018-19 Approved vide order dated 25.4.2016 in Petition No. 215/TT/2015 13.20 23.69 23.69 23.69 As claimed by the Petitioner 11.63 21.59 22.89 23.41 Allowed after true-up in this order 11.63 21.59 22.89 23.41 Operation & Maintenance Expenses (O&M Expenses)

53. The Petitioner has not claimed any O&M Expenses for the instant assets as these are Spare ICTs and reactors at various sub-stations of the Eastern Region. Order in Petition No.76/TT/2020 Page 29 of 54 Interest on Working Capital (IWC)

54. The Petitioner is entitled to claim IWC as per Regulation 28(1)(c) of the 2014 Tariff Regulations as under:

(i) Maintenance Spares: Maintenance spares have been worked out based on 15% of Operation and Maintenance Expenses specified in Regulation 28.

(ii) O&M Expenses: O&M Expenses have been considered for one month of the allowed O&M Expenses.

(iii) Receivables: The receivables have been worked out on the basis of 2 months of annual transmission charges as worked out above.

(iv) Rate of interest on working capital Rate of interest on working capital is considered on normative basis in accordance with Regulation 28(3) of the 2014 Tariff Regulations.

55. The trued up IWC allowed for the transmission assets for the 2014-19 tariff period is as under: ( in lakh) Asset-A Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 O & M Expenses 0.00 0.00 0.00 0.00 0.00 Maintenance Spares 0.00 0.00 0.00 0.00 0.00 Receivables 147.16 150.51 150.85 146.71 143.62 Total Working Capital 147.16 150.51 150.85 146.71 143.62 Rate of Interest (%) 13.50 13.50 13.50 13.50 13.50 Interest on Working Capital 19.87 20.32 20.37 19.81 19.39 ( in lakh) Asset-B Particulars 2015-16 (Pro-rata for

347 days) 2016-17 2017-18 2018-19 O & M Expenses 0.00 0.00 0.00 0.00 Maintenance Spares 0.00 0.00 0.00 0.00 Receivables 7.04 12.01 12.01 11.87 Order in Petition No.76/TT/2020 Page 30 of 54 Asset-B Particulars 2015-16 (Pro-rata for

347 days) 2016-17 2017-18 2018-19 Total Working Capital 7.04 12.01 12.01 11.87 Rate of Interest (%) 13.50 13.50 13.50 13.50 Interest on Working Capital 0.90 1.62 1.62 1.60

56. IWC approved vide order dated 17.10.2017 in Petition No. 37/TT/2017, IWC claimed in the instant petition and trued-up IWC allowed in respect of Combined Asset-A is as follows: ( in lakh) Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 Approved vide order dated 17.10.2017 in Petition No. 37/TT/2017 19.87 20.06 20.01 19.61 19.00 Claimed by the Petitioner in the instant petition 19.92 20.36 20.40 19.84 19.42 Approved after true-up in this order 19.87 20.32 20.37 19.81 19.39

57. IWC approved vide order dated 25.4.2016 in Petition No. 215/TT/2015, IWC claimed in the instant petition and trued-up IWC allowed in respect of Asset-B is shown in the table that follows: ( in lakh) Asset-B Particulars 2015-16 2016-17 2017-18 2018-19 Approved vide order dated 25.4.2016 in Petition No. 215/TT/2015 0.97 1.80 1.75 1.70 As claimed by the Petitioner in the instant Petition 0.90 1.62 1.62 1.60 Allowed after true-up in this order 0.90 1.62 1.62 1.60 Annual Fixed Charges for the 2014-19 Tariff Period

58. The annual fixed charges after truing-up for the 2014-19 tariff period for the transmission assets are as under: ( in lakh) Combined Asset-A Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 Depreciation 272.26 285.92 294.85 296.06 298.44 Interest on Loan 287.50 276.72 259.79 232.95 208.85 Order in Petition No.76/TT/2020 Page 31 of 54 Combined Asset-A Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 Return on Equity 303.35 320.11 330.11 331.47 335.03 Int. on Working Capital 19.87 20.32 20.37 19.81 19.39 Op. and Maintenance 0.00 0.00 0.00 0.00 0.00 Total 882.98 903.07 905.11 880.28 861.70 ( in lakh) Asset-B Particulars 2015-16 (Pro-rata for

347 days) 2016-17 2017-18 2018-19 Depreciation 11.63 21.59 22.89 23.41 Interest on Loan 14.50 24.72 21.98 19.97 Return on Equity 12.99 24.13 25.58 26.23 Interest on Working Capital 0.90 1.62 1.62 1.60 O&M Expenses 0.00 0.00 0.00 0.00 Total 40.02 72.05 72.07 71.22

59. The annual fixed charges approved vide order dated 17.10.2017 in Petition No. 37/TT/2017, annual fixed charges claimed in the instant petition and trued-up annual fixed charges allowed in respect of Combined Asset-A is shown in the table below: ( in lakh) Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 Approved vide order dated 17.10.2017 in Petition No. 37/TT/2017 883.00 891.70 889.31 871.63 844.35 Claimed by the Petitioner in the instant petition 885.15 904.99 906.67 881.67 862.92 Approved after true-up in this order 882.98 903.07 905.11 880.28 861.70

60. The annual fixed charges approved vide order dated 25.4.2016 in Petition No. 215/TT/2015, annual fixed charges claimed in the instant petition and trued-up annual fixed charges allowed in respect of Asset-B is shown in the table below: ( in lakh) Asset-B Particulars 2015-16 (Pro-rata for

347 days) 2016-17 2017-18 2018-19 Approved vide order dated 25.4.2016 in Petition No. 215/TT/2015 45.38 80.19 77.80 75.43 As claimed by the Petitioner in the instant Petition 40.04 72.06 72.07 71.21 Allowed after true-up in this order 40.02 72.05 72.07 71.22 Order in Petition No.76/TT/2020 Page 32 of 54 DETERMINATION OF ANNUAL FIXED CHARGES FOR THE 2019-24 TARIFF PERIOD

61. The Petitioner has submitted the tariff forms combining the Combined Asset-A and Asset-B wherein COD has been achieved prior to 1.4.2019, as a single asset. Accordingly, as per proviso (i) of Regulation 8(1) of the 2019 Tariff Regulations, single tariff for the Combined Asset has been worked out for the 2019-24 tariff period.

62. The Petitioner has claimed the following transmission charges for the Combined Asset for the 2019-24 tariff period: ( in lakh) Particulars 2019-20 2020-21 t2021-22 2022-23 2023-24 Depreciation 326.59 326.59 t326.59 326.59 326.59 Interest on Loan 203.22 174.29 145.47 116.80 88.08 Return on Equity 340.44 340.44 340.44 340.44 340.44 Interest on Working Capital 34.99 35.41 35.77 36.19 36.51 Operation and Maintenance 502.53 520.82 539.07 558.60 577.10 Total 1407.77 1397.55 1387.34 1378.62 1368.72

63. The Petitioner has claimed the following IWC for the Combined Asset for the 2019-24 tariff period: ( in lakh) Particulars 2019-20 2020-21 2021-22 2022-23 2023-24 O&M expenses 41.88 43.40 44.92 46.55 48.09 Maintenance Spares 75.38 78.12 80.86 83.79 86.57 Receivables 173.09 172.30 171.04 169.97 168.29 Total 290.35 293.82 296.82 300.31 302.95 Rate of Interest (%) 12.05 12.05 12.05 12.05 12.05 Interest on Working Capital 34.99 35.41 35.77 36.19 36.51 Effective Date of Commercial Operation (E-COD)

64. The Petitioner in the instant Petition has submitted that E-COD of the combined assets works out to be 14.2.2013. Based on the trued up admitted capital cost and actual COD of the assets, E-COD has been worked out as follows: Order in Petition No.76/TT/2020 Page 33 of 54 Computation of Effective COD Assets Actual Admitted Capital Cost as on 31.3.2019 ( in lakh) Weight of the cost (in %) No. of days from last Weighted days Effective COD (latest COD Total weighted days) Combined Asset-A 13.12.2012 5697.20 92.66% 858.00 795.07 14.2.2013 Asset-B 20.4.2015 450.97 7.34% 0.00 0.00 Total 6148.17 100.00% 795.07

65. E-COD has been used to determine the lapsed life of the project as a whole, which works out as six years as on 1.4.2019 (i.e. the number of completed years as on 1.4.2019 from E-COD). Weighted Average Life (WAL)

66. The life as defined in Regulation 33 of the 2019 Tariff Regulations has been considered for determination of Weighted Average Life.

67. The combined asset may have multiple elements (i.e. land, building, transmission line, sub-station and PLCC) and each element may have different span of life. Therefore, the concept of Weighted Average Life (WAL) has been used as the useful life of the project as whole.

68. WAL has been determined based on the admitted capital cost of individual elements as on 31.3.2019 and their respective life as stipulated in the 2019 Tariff Regulations. The element-wise life as it was defined in the 2014 Tariff Regulations prevailing at the time of actual COD of the individual assets has been ignored for this purpose. Accordingly, WAL of the Combined Asset has been worked out as under: Particulars Combined Asset-A ( in lakh) Asset-B ( in lakh) Combined Cost ( in lakh) Life as per 2014 Regulation Weight (c)=(a) x (b) Weighted Average Life = (d)= (c) (a) Land 0.00 0.00 0.00 0 0.00 Building 0.00 0.00 0.00 25 0.00 Transmission 0.00 0.00 0.00 35 0.00 Order in Petition No.76/TT/2020 Page 34 of 54 Line Sub Station 5697.20 450.97 6148.17 25 153704.25 PLCC 0.00 0.00 0.00 15 0.00 Leasehold Land 0.00 0.00 0.00 25 0.00 IT Equipment and software 0.00 0.00 0.00 7 0.00 Total 5697.20 450.97 6148.17 153704.25 Weighted Average life 25.00 Years

69. WAL as on 1.4.2019 as determined above is applicable prospectively (i.e. for the 2019-24 tariff period onwards) and no retrospective adjustment of depreciation in previous tariff period is required to be done. As discussed above, the E-COD of the assets is 14.2.2013 and the lapsed life of the project as a whole, works out as six years as on 1.4.2019 (i.e. the number of completed years as on 1.4.2019 from Effective COD). Accordingly, WAL has been used to determine the remaining useful life as on 31.3.2019 to be 19 years. Capital Cost

70. Regulation 19 of the 2019 Tariff Regulations provides as under:

19. Capital Cost: (1) The Capital cost of the generating station or the transmission system, as the case may be, as determined by the Commission after prudence check in accordance with these regulations shall form the basis for determination of tariff for existing and new projects. (2) The Capital Cost of a new project shall include the following: (a) The expenditure incurred or projected to be incurred up to the date of commercial operation of the project; (b) Interest during construction and financing charges, on the loans (i) being equal to 70% of the funds deployed, in the event of the actual equity in excess of 30% of the funds deployed, by treating the excess equity as normative loan, or (ii) being equal to the actual amount of loan in the event of the actual equity less than 30% of the funds deployed; (c) Any gain or loss on account of foreign exchange risk variation pertaining to the loan amount availed during the construction period; (d) Interest during construction and incidental expenditure during construction as computed in accordance with these regulations; (e) Capitalised initial spares subject to the ceiling rates in accordance with these regulations; (f) Expenditure on account of additional capitalization and de-capitalisation determined in accordance with these regulations; Order in Petition No.76/TT/2020 Page 35 of 54 (g) Adjustment of revenue due to sale of infirm power in excess of fuel cost prior to the date of commercial operation as specified under Regulation 7 of these regulations; (h) Adjustment of revenue earned by the transmission licensee by using the assets before the date of commercial operation;

(i) Capital expenditure on account of ash disposal and utilization including handling and transportation facility; (j) Capital expenditure incurred towards railway infrastructure and its augmentation for transportation of coal upto the receiving end of the generating station but does not include the transportation cost and any other appurtenant cost paid to the railway; (k) Capital expenditure on account of biomass handling equipment and facilities, for co-firing;

(l) Capital expenditure on account of emission control system necessary to meet the revised emission standards and sewage treatment plant; (m) Expenditure on account of fulfilment of any conditions for obtaining environment clearance for the project; (n) Expenditure on account of change in law and force majeure events; and (o) Capital cost incurred or projected to be incurred by a thermal generating station, on account of implementation of the norms under Perform, Achieve and Trade (PAT) scheme of Government of India shall be considered by the Commission subject to sharing of benefits accrued under the PAT scheme with the beneficiaries. (3) The Capital cost of an existing project shall include the following: (a) Capital cost admitted by the Commission prior to 1.4.2019 duly trued up by excluding liability, if any, as on 1.4.2019; (b) Additional Capitalization and de-capitalization for the respective year of tariff as determined in accordance with these regulations; (c) Capital expenditure on account of renovation and modernisation as admitted by this Commission in accordance with these regulations; (d) Capital expenditure on account of ash disposal and utilization including handling and transportation facility; (e) Capital expenditure incurred towards railway infrastructure and its augmentation for transportation of coal upto the receiving end of generating station but does not include the transportation cost and any other appurtenant cost paid to the railway; and (f) Capital cost incurred or projected to be incurred by a thermal generating station, on account of implementation of the norms under Perform, Achieve and Trade (PAT) scheme of Government of India shall be considered by the Commission subject to sharing of benefits accrued under the PAT scheme with the beneficiaries. (4) The capital cost in case of existing or new hydro generating station shall also include: (a) cost of approved rehabilitation and resettlement (R&R) plan of the project in conformity with National R&R Policy and R&R package as approved; and (b) cost of the developers 10% contribution towards Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) and Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) project in the affected area (5) The following shall be excluded from the capital cost of the existing and new projects: Order in Petition No.76/TT/2020 Page 36 of 54 (a) The assets forming part of the project, but not in use, as declared in the tariff petition; (b) De-capitalised Assets after the date of commercial operation on account of replacement or removal on account of obsolescence or shifting from one project to another project: Provided that in case replacement of transmission asset is recommended by Regional Power Committee, such asset shall be de-capitalised only after its redeployment; Provided further that unless shifting of an asset from one project to another is of permanent nature, there shall be no de-capitalization of the concerned assets. (c) In case of hydro generating stations, any expenditure incurred or committed to be incurred by a project developer for getting the project site allotted by the State Government by following a transparent process; (d) Proportionate cost of land of the existing project which is being used for generating power from generating station based on renewable energy; and (e) Any grant received from the Central or State Government or any statutory body or authority for the execution of the project which does not carry any liability of repayment.

71. The Petitioner has claimed the capital cost of Combined Asset as 6185.38 lakh as on 31.3.2019.

72. The admitted trued up capital cost of 6148.17 lakh as on 31.3.2019 has been considered as the opening capital cost as on 1.4.2019 for determination of tariff for 2019-24 tariff period in accordance with Regulation 19 of the 2019 Tariff Regulations. The element-wise capital cost (i.e. land, building, transmission line, sub-station and PLCC) as admitted by the Commission as on 31.3.2019 for the Combined Asset has been considered as capital cost for Combined Asset as on 1.4.2019, as per the following details: Particulars Capital Cost for Combined Asset as on 1.4.2019 Freehold Land 0.00 Leasehold Land 0.00 Building & Other Civil Works 0.00 Transmission Line 0.00 Sub-Station Equipment 6148.17 PLCC 0.00 IT Equipment and Software 0.00 TOTAL 6148.17 Order in Petition No.76/TT/2020 Page 37 of 54

73. The capital cost as on 1.4.2019 is worked out as under: ( in lakh) Combined Capital Cost as on 31.3.2019 Additional Spares allowed as per APTEL judgment dated 14.9.2019 Combined Capital Cost as on 1.4.2019 6148.17 0.00 6148.17

74. The trued-up capital cost of 6148.17 lakh for Combined Asset is considered as admitted capital cost as on 1.4.2019 for working out the tariff for the 2019-24 tariff period. Additional Capital Expenditure (ACE)

75. The Petitioner has not claimed any ACE for the 2019-24 tariff period for the Combined Asset. Debt-Equity Ratio

76. Regulation 18 of the 2019 Tariff Regulations provides as under:

18. Debt-Equity Ratio: (1) For new projects, the debt-equity ratio of 70:30 as on date of commercial operation shall be considered. If the equity actually deployed is more than 30% of the capital cost, equity in excess of 30% shall be treated as normative loan: Provided that:

i. where equity actually deployed is less than 30% of the capital cost, actual equity shall be considered for determination of tariff:

ii. the equity invested in foreign currency shall be designated in Indian rupees on the date of each investment:

iii. any grant obtained for the execution of the project shall not be considered as a part of capital structure for the purpose of debt: equity ratio. Explanation-The premium, if any, raised by the generating company or the transmission licensee, as the case may be, while issuing share capital and investment of internal resources created out of its free reserve, for the funding of the project, shall be reckoned as paid up capital for the purpose of computing return on equity, only if such premium amount and internal resources are actually utilised for meeting the capital expenditure of the generating station or the transmission system. (2) The generating company or the transmission licensee, as the case may be, shall submit the resolution of the Board of the company or approval of the competent authority in other cases regarding infusion of funds from internal resources in support of the utilization made or proposed to be made to meet the capital expenditure of the generating station or the transmission system including communication system, as the case may be. Order in Petition No.76/TT/2020 Page 38 of 54 (3) In case of the generating station and the transmission system including communication system declared under commercial operation prior to 1.4.2019, debt: equity ratio allowed by the Commission for determination of tariff for the period ending 31.3.2019 shall be considered: Provided that in case of a generating station or a transmission system including communication system which has completed its useful life as on or after 1.4.2019, if the equity actually deployed as on 1.4.2019 is more than 30% of the capital cost, equity in excess of 30%shall not be taken into account for tariff computation; Provided further that in case of projects owned by Damodar Valley Corporation, the debt: equity ratio shall be governed as per sub-clause (ii) of clause (2) of Regulation 72 of these regulations. (4).In case of the generating station and the transmission system including communication system declared under commercial operation prior to 1.4.2019, but where debt: equity ratio has not been determined by the Commission for determination of tariff for the period ending 31.3.2019, the Commission shall approve the debt: equity ratio in accordance with clause (1) of this Regulation. (5).Any expenditure incurred or projected to be incurred on or after 1.4.2019 as may be admitted by the Commission as Additional Capital Expenditure for determination of tariff, and renovation and modernisation expenditure for life extension shall be serviced in the manner specified in clause (1) of this Regulation.

77. The details of the debt-equity ratio considered for the purpose of computation of tariff for the 2019-24 tariff period are as under: Combined Asset Capital Cost as on 1.4.2019 (in lakh) Total Cost as on 31.3.2024 (in lakh) Debt 4303.95 70.00 4303.95 70.00 Equity 1844.22 30.00 1844.22 30.00 Total 6148.17 100.00 6148.17 100.00 Return on Equity (RoE)

78. Regulations 30 and 31 of the 2019 Tariff Regulations provide as under:

30. Return on Equity: (1) Return on equity shall be computed in rupee terms, on the equity base determined in accordance with Regulation 18 of these regulations. (2) Return on equity shall be computed at the base rate of 15.50% for thermal generating station, transmission system including communication system and run-of- river hydro generating station, and at the base rate of 16.50% for the storage type hydro generating stations including pumped storage hydro generating stations and run-of-river generating station with pondage: Order in Petition No.76/TT/2020 Page 39 of 54 Provided that return on equity in respect of Additional Capitalization after cut- off date beyond the original scope excluding Additional Capitalization due to Change in Law, shall be computed at the weighted average rate of interest on actual loan portfolio of the generating station or the transmission system; Provided further that:

i. In case of a new project, the rate of return on equity shall be reduced by 1.00% for such period as may be decided by the Commission, if the generating station or transmission system is found to be declared under commercial operation without commissioning of any of the Restricted Governor Mode Operation (RGMO) or Free Governor Mode Operation (FGMO), data telemetry, communication system up to load dispatch centre or protection system based on the report submitted by the respective RLDC;

ii.in case of existing generating station, as and when any of the requirements under (i) above of this Regulation are found lacking based on the report submitted by the concerned RLDC, rate of return on equity shall be reduced by 1.00% for the period for which the deficiency continues;

iii. in case of a thermal generating station, with effect from 1.4.2020:

a) rate of return on equity shall be reduced by 0.25% in case of failure to achieve the ramp rate of 1% per minute;

b) an additional rate of return on equity of 0.25% shall be allowed for every incremental ramp rate of 1% per minute achieved over and above the ramp rate of 1% per minute, subject to ceiling of additional rate of return on equity of 1.00%: Provided that the detailed guidelines in this regard shall be issued by National Load Dispatch Centre by 30.6.2019.

31. Tax on Return on Equity: (1) The base rate of return on equity as allowed by the Commission under Regulation 30 of these regulations shall be grossed up with the effective tax rate of the respective financial year. For this purpose, the effective tax rate shall be considered on the basis of actual tax paid in respect of the financial year in line with the provisions of the relevant Finance Acts by the concerned generating company or the transmission licensee, as the case may be. The actual tax paid on income from other businesses including deferred tax liability (i.e. income from business other than business of generation or transmission, as the case may be) shall be excluded for the calculation of effective tax rate. (2) Rate of return on equity shall be rounded off to three decimal places and shall be computed as per the formula given below: Rate of pre-tax return on equity = Base rate / (1-t) Where t is the effective tax rate in accordance with clause (1) of this Regulation and shall be calculated at the beginning of every financial year based on the estimated profit and tax to be paid estimated in line with the provisions of the relevant Finance Act applicable for that financial year to the company on pro-rata basis by excluding the income of non-generation or non-transmission business, as the case may be, and the corresponding tax thereon. In case of generating company or transmission licensee paying Minimum Alternate Tax (MAT), t shall be considered as MAT rate including surcharge and cess. Illustration- Order in Petition No.76/TT/2020 Page 40 of 54

(i) In case of a generating company or a transmission licensee paying Minimum Alternate Tax (MAT) @ 21.55% including surcharge and cess: Rate of return on equity = 15.50/(1-0.2155) = 19.758%

(ii) In case of a generating company or a transmission licensee paying normal corporate tax including surcharge and cess: (a) Estimated Gross Income from generation or transmission business for FY 2019-20 is Rs 1,000 crore; (b) Estimated Advance Tax for the year on above is Rs 240 crore; (c) Effective Tax Rate for the year 2019-20 = Rs 240 Crore/Rs 1000 Crore = 24%; (d) Rate of return on equity = 15.50/ (1-0.24) = 20.395% (3) The generating company or the transmission licensee, as the case may be, shall true up the grossed up rate of return on equity at the end of every financial year based on actual tax paid together with any additional tax demand including interest thereon, duly adjusted for any refund of tax including interest received from the income tax authorities pertaining to the tariff period 2019-24 on actual gross income of any financial year. However, penalty, if any, arising on account of delay in deposit or short deposit of tax amount shall not be claimed by the generating company or the transmission licensee, as the case may be. Any under-recovery or over-recovery of grossed up rate on return on equity after truing up, shall be recovered or refunded to beneficiaries or the long term customers, as the case may be, on year to year basis.

79. The Petitioner has submitted that the MAT rate is applicable to the Petitioner company. Accordingly, the MAT rate applicable during the 2018-19 has been considered for the purpose of RoE, which shall be trued-up with actual tax rate in accordance with Regulation 31(3) of the 2019 Tariff Regulations. RoE allowed for the Combined Asset under Regulation 30 of the 2019 Tariff Regulations is as follows: ( in lakh) Combined Asset Particulars 2019-20 2020-21 2021-22 2022-23 2023-24 Net Opening Equity 1844.22 1844.22 1844.22 1844.22 1844.22 Increase in Equity due to addition during the year 0.00 0.00 0.00 0.00 0.00 Closing Equity 1844.22 1844.22 1844.22 1844.22 1844.22 Average Equity 1844.22 1844.22 1844.22 1844.22 1844.22 Return on Equity (Base Rate) (%) 15.500 15.500 15.500 15.500 15.500 MAT Rate for respective year 17.472 17.472 17.472 17.472 17.472 Applicable ROE Rate (%) 18.782 18.782 18.782 18.782 18.782 Return on Equity for the year 346.38 346.38 346.38 346.38 346.38 Order in Petition No.76/TT/2020 Page 41 of 54 Interest on Loan (IoL)

80. Regulation 32 of the 2019 Tariff Regulations provides as under:

32. Interest on loan capital: (1) The loans arrived at in the manner indicated in Regulation 18 of these regulations shall be considered as gross normative loan for calculation of interest on loan. (2) The normative loan outstanding as on 1.4.2019 shall be worked out by deducting the cumulative repayment as admitted by the Commission up to 31.3.2019 from the gross normative loan. (3) The repayment for each of the year of the tariff period 2019-24 shall be deemed to be equal to the depreciation allowed for the corresponding year/period. In case of de- capitalization of assets, the repayment shall be adjusted by taking into account cumulative repayment on a pro rata basis and the adjustment should not exceed cumulative depreciation recovered upto the date of de-capitalisation of such asset. (4) Notwithstanding any moratorium period availed by the generating company or the transmission licensee, as the case may be, the repayment of loan shall be considered from the first year of commercial operation of the project and shall be equal to the depreciation allowed for the year or part of the year. (5) The rate of interest shall be the weighted average rate of interest calculated on the basis of the actual loan portfolio after providing appropriate accounting adjustment for interest capitalized: Provided that if there is no actual loan for a particular year but normative loan is still outstanding, the last available weighted average rate of interest shall be considered; Provided further that if the generating station or the transmission system, as the case may be, does not have actual loan, then the weighted average rate of interest of the generating company or the transmission licensee as a whole shall be considered. (6) The interest on loan shall be calculated on the normative average loan of the year by applying the weighted average rate of interest. (7) The changes to the terms and conditions of the loans shall be reflected from the date of such re-financing.

81. The weighted average rate of IoL has been considered on the basis of rate prevailing as on 1.4.2019. The Petitioner has prayed that the change in interest rate due to floating rate of interest applicable, if any, during the 2019-24 tariff period will be Order in Petition No.76/TT/2020 Page 42 of 54 adjusted. Accordingly, the floating rate of interest, if any, shall be considered at the time of true up or next revision of tariff. By considering above, IoL has been worked out in accordance with Regulation 32 of the 2019 Tariff Regulations. IoL allowed for the Combined Asset is as under: ( in lakh) Combined Asset Particular 2019-20 2020-21 2021-22 2022-23 2023-24 Gross Normative Loan 4303.95 4303.95 4303.95 4303.95 4303.95 Cumulative Repayments upto Previous Year 1834.60 2159.23 2483.85 2808.47 3133.10 Net Loan-Opening 2469.34 2144.72 1820.10 1495.47 1170.85 Additions 0.00 0.00 0.00 0.00 0.00 Repayment during the year 324.62 324.62 324.62 324.62 324.62 Net Loan-Closing 2144.72 1820.10 1495.47 1170.85 846.23 Average Loan 2307.03 1982.41 1657.79 1333.16 1008.54 Weighted Average Rate of Interest on Loan (%) 8.850 8.849 8.854 8.872 8.898 Interest on Loan 204.18 175.42 146.78 118.28 89.74 Depreciation

82. Regulation 33 of the 2019 Tariff Regulations provides as under:

33. Depreciation: (1) Depreciation shall be computed from the date of commercial operation of a generating station or unit thereof or a transmission system or element thereof including communication system. In case of the tariff of all the units of a generating station or all elements of a transmission system including communication system for which a single tariff needs to be determined, the depreciation shall be computed from the effective date of commercial operation of the generating station or the transmission system taking into consideration the depreciation of individual units: Provided that effective date of commercial operation shall be worked out by considering the actual date of commercial operation and installed capacity of all the units of the generating station or capital cost of all elements of the transmission system, for which single tariff needs to be determined. (2) The value base for the purpose of depreciation shall be the capital cost of the asset admitted by the Commission. In case of multiple units of a generating station or multiple elements of a transmission system, weighted average life for the generating station of the transmission system shall be applied. Depreciation shall be chargeable from the first year of commercial operation. In case of commercial operation of the asset for part of the year, depreciation shall be charged on pro rata basis. (3) The salvage value of the asset shall be considered as 10% and depreciation shall be allowed up to maximum of 90% of the capital cost of the asset: Provided that the salvage value for IT equipment and software shall be considered as NIL and 100% value of the assets shall be considered depreciable; Order in Petition No.76/TT/2020 Page 43 of 54 Provided further that in case of hydro generating stations, the salvage value shall be as provided in the agreement, if any, signed by the developers with the State Government for development of the generating station: Provided also that the capital cost of the assets of the hydro generating station for the purpose of computation of depreciated value shall correspond to the percentage of sale of electricity under long-term power purchase agreement at regulated tariff: Provided also that any depreciation disallowed on account of lower availability of the generating station or unit or transmission system as the case may be, shall not be allowed to be recovered at a later stage during the useful life or the extended life. (4) Land other than the land held under lease and the land for reservoir in case of hydro generating station shall not be a depreciable asset and its cost shall be excluded from the capital cost while computing depreciable value of the asset. (5) Depreciation shall be calculated annually based on Straight Line Method and at rates specified in Appendix-I to these regulations for the assets of the generating station and transmission system: Provided that the remaining depreciable value as on 31st March of the year closing after a period of 12 years from the effective date of commercial operation of the station shall be spread over the balance useful life of the assets. (6) In case of the existing projects, the balance depreciable value as on 1.4.2019 shall be worked out by deducting the cumulative depreciation as admitted by the Commission upto 31.3.2019 from the gross depreciable value of the assets. (7) The generating company or the transmission licensee, as the case may be, shall submit the details of proposed capital expenditure five years before the completion of useful life of the project along with justification and proposed life extension. The Commission based on prudence check of such submissions shall approve the depreciation on capital expenditure. (8) In case of de-capitalization of assets in respect of generating station or unit thereof or transmission system or element thereof, the cumulative depreciation shall be adjusted by taking into account the depreciation recovered in tariff by the de-capitalized asset during its useful services.

83. Depreciation for the combined asset has been worked out considering the admitted capital expenditure as on 31.3.2019 and accumulated depreciation up to 31.3.2019. The Gross Block during the tariff period 2019-24 has been depreciated at weighted average rate of depreciation (WAROD). WAROD has been worked out (Annexure-II) after taking into account the depreciation rates of assets as prescribed Order in Petition No.76/TT/2020 Page 44 of 54 in 2019 Tariff Regulations. The depreciation allowed for the Combined Asset is as under: ( in lakh) Combined Asset Particulars 2019-20 2020-21 2021-22 2022-23 2023-24 Opening Capital Cost 6148.17 6148.17 6148.17 6148.17 6148.17 Additional Capital Expenditure during the year 0.00 0.00 0.00 0.00 0.00 Closing Capital Cost 6148.17 6148.17 6148.17 6148.17 6148.17 Average Capital Cost 6148.17 6148.17 6148.17 6148.17 6148.17 Balance useful life at the beginning of the year

19 18 17 16 15 Rate of Depreciation (%) 5.28 5.28 5.28 5.28 5.28 Depreciable Value 5533.35 5533.35 5533.35 5533.35 5533.35 Depreciation during the year 324.62 324.62 324.62 324.62 324.62 Depreciation upto previous year 1834.60 2159.23 2483.85 2808.47 3133.10 Aggregate Cumulative Depreciation 2159.23 2483.85 2808.47 3133.10 3457.72 Remaining Aggregate Depreciable Value 3374.13 3049.50 2724.88 2400.26 2075.63 Operation & Maintenance Expenses (O&M Expenses)

84. Regulations 35(3)(a) and (4) of the 2019 Tariff Regulations provide as under: 35.Operation and Maintenance Expenses: (3) Transmission system: (a) The following normative operation and maintenance expenses shall be admissible for the transmission system: Particulars 2019- 2020- 2021- 2022- 2023- Norms for sub-station Bays ( Lakh per bay)

765 kV 45.01 46.60 48.23 49.93 51.68

400 kV 32.15 33.28 34.45 35.66 36.91

220 kV 22.51 23.30 24.12 24.96 25.84

132 kV and below 16.08 16.64 17.23 17.83 18.46 Norms for Transformers ( Lakh per MVA)

765 kV 0.491 0.508 0.526 0.545 0.564

400 kV 0.358 0.371 0.384 0.398 0.411

220 kV 0.245 0.254 0.263 0.272 0.282

132 kV and below 0.245 0.254 0.263 0.272 0.282 Order in Petition No.76/TT/2020 Page 45 of 54 Norms for AC and HVDC lines ( Lakh per km) Single Circuit (Bundled Conductor with six or more sub-conductors) 0.881 0.912 0.944 0.977 1.011 Single Circuit (Bundled conductor with four sub-conductors) 0.755 0.781 0.809 0.837 0.867 Single Circuit (Twin & Triple Conductor) 0.503 0.521 0.539 0.558 0.578 Single Circuit (Single Conductor) 0.252 0.260 0.270 0.279 0.289 Double Circuit (Bundled conductor with four or more sub-conductors) 1.322 1.368 1.416 1.466 1.517 Double Circuit (Twin & Triple Conductor) 0.881 0.912 0.944 0.977 1.011 Double Circuit (Single Conductor) 0.377 0.391 0.404 0.419 0.433 Multi Circuit (Bundled Conductor with four or more sub-conductor) 2.319 2.401 2.485 2.572 2.662 Multi Circuit (Twin & Triple Conductor) 1.544 1.598 1.654 1.713 1.773 Norms for HVDC stations HVDC Back-to-Back stations (Rs Lakh per 500 MW) (Except Gazuwaka BTB)

834 864 894 925 958 Gazuwaka HVDC Back-to-Back station ( Lakh per 500 MW) 1,666 1,725 1,785 1,848 1,913

500 kV Rihand-Dadri HVDC bipole scheme (Rs Lakh) (1500 MW) 2,252 2,331 2,413 2,498 2,586

500 kV Talcher- Kolar HVDC bipole scheme (Rs Lakh) (2000 MW) 2,468 2,555 2,645 2,738 2,834

500 kV Bhiwadi-Balia HVDC bipole scheme (Rs Lakh) (2500 MW) 1,696 1,756 1,817 1,881 1,947

800 kV, Bishwanath-Agra HVDC bipole scheme (Rs Lakh) (3000 MW) 2,563 2,653 2,746 2,842 2,942 Provided that the O&M expenses for the GIS bays shall be allowed as worked out by multiplying 0.70 of the O&M expenses of the normative O&M expenses for bays; Provided further that: Order in Petition No.76/TT/2020 Page 46 of 54

i. the operation and maintenance expenses for new HVDC bi-pole schemes commissioned after 1.4.2019 for a particular year shall be allowed pro-rata on the basis of normative rate of operation and maintenance expenses of similar HVDC bi-pole scheme for the corresponding year of the tariff period;

ii. the O&M expenses norms for HVDC bi-pole line shall be considered as Double Circuit quad AC line;

iii. the O&M expenses of 500 kV Mundra-Mohindergarh HVDC bipole scheme (2000 MW)shall be allowed as worked out by multiplying 0.80 of the normative O&M expenses for 500 kV Talchar-Kolar HVDC bi-pole scheme (2000 MW);

iv. the O&M expenses of 800 kV Champa-Kurukshetra HVDC bi-pole scheme (3000 MW) shall be on the basis of the normative O&M expenses for 800 kV, Bishwanath-Agra HVDC bi-pole scheme;

v. the O&M expenses of 800 kV, Alipurduar-Agra HVDC bi-pole scheme (3000 MW)shall be allowed as worked out by multiplying 0.80 of the normative O&M expenses for 800 kV, Bishwanath-Agra HVDC bi-pole scheme; and

vi. the O&M expenses of Static Synchronous Compensator and Static Var Compensator shall be worked at 1.5% of original project cost as on commercial operation which shall be escalated at the rate of 3.51% to work out the O&M expenses during the tariff period. The O&M expenses of Static Synchronous Compensator and Static Var Compensator, if required, may be reviewed after three years. (b) The total allowable operation and maintenance expenses for the transmission system shall be calculated by multiplying the number of sub-station bays, transformer capacity of the transformer (in MVA) and km of line length with the applicable norms for the operation and maintenance expenses per bay, per MVA and per km respectively. (c) The Security Expenses and Capital Spares for transmission system shall be allowed separately after prudence check: Provided that the transmission licensee shall submit the assessment of the security requirement and estimated security expenses, the details of year-wise actual capital spares consumed at the time of truing up with appropriate justification. (4) Communication system: The operation and maintenance expenses for the communication system shall be worked out at 2.0% of the original project cost related to such communication system. The transmission licensee shall submit the actual operation and maintenance expenses for truing up.

85. The Petition has claimed following O&M Expenses for the 2019-24 period for the Combined Asset: Transformer ( in lakh) Particulars 2019-20 2020-21 2021-22 2022-23 2023-24

400 kV Sub-station ICT Order in Petition No.76/TT/2020 Page 47 of 54 Particulars 2019-20 2020-21 2021-22 2022-23 2023-24 Norm ( lakh/MVA) 0.358 0.371 0.384 0.398 0.411 MVA Rating 315 315 315 315 315 No. of Transformers 4 4 4 4 4 O&M expense claimed 451.08 467.46 483.84 501.48 517.86

220 kV Sub-station ICT Norm ( lakh/MVA) 0.245 0.254 0.263 0.272 0.282 MVA Rating 160 160 160 160 160 No. of Transformers 1 1 1 1 1 O&M Expenses claimed 39.20 40.64 42.08 43.52 45.12

132 kV Sub-station and below ICT Norm ( lakh/MVA) 0.245 0.254 0.263 0.272 0.282 MVA Rating 50 50 50 50 50 No. of Transformers 1 1 1 1 1 O&M Expenses claimed 12.25 12.70 13.15 13.60 14.10 Total O&M Expenses 502.53 520.80 539.07 558.60 577.08

86. We have considered the submission of the Petitioner. The assets covered in the instant petition are spare ICTs and the Commission has decided in order dated 24.1.20121 in Petition No. 136/TT/2020 that O&M Expenses cannot be spare assets. Relevant extract from the order dated 24.1.2021 is as under:

28. We are also not convinced with the Petitioners clarification that it has claimed O&M Expenses for the 2014-19 tariff period since the 2019 Tariff Regulations provide for O&M Expenses for transformers based on their rating. The norms specified in the 2019 Tariff Regulations are for transmission elements that are in regular use and not for spares which are used only in case of any eventualities. As already stated earlier, the assets in use as spares are being granted tariff only on the basis of consent and approval of the concerned Regional Power Committee and as these assets are not being in regular use, we are of the view that O&M Expenses cannot be granted to the instant assets. Accordingly, O&M Expenses are not allowed for the Combined Asset for the 2019-24 tariff period. We also feel that it is pertinent to mention here that disallowance of O&M Expenses for the Combined Asset does not mean that they do not need any maintenance and the consequent expenditure. The Combined Asset requires maintenance and the expenditure involved in maintaining them would be miniscule compared to the O&M Expenses in respect of transformers put to regular use. We are also of the view that the Petitioner should meet this expenditure from the O&M Expenses allowed for the regular ICTs installed at Mandola and Ludhiana in Northern Region. In case, the expenses are unusually high and cannot be met from the O&M Expenses allowed for the regular ICTs, the Petitioner may approach the Commission with certification of O&M expenditure from RPC at the time of true-up.

29. To bring in more clarity on issues regarding the spare ICTs/ reactors/ transformers and for knowledge of the beneficiaries, the Petitioner is directed to submit the following Order in Petition No.76/TT/2020 Page 48 of 54 information on affidavit within 60 days of issue of this order and also to display the same on its website: (a) the region-wise approved spare ICTs/ reactors/ transformers; (b) the details of ICTs/ reactors/ transformers which were initially part of a transmission system or project and later on, they being used as regional spares; (c) the usage philosophy of the spare ICTs being followed by the Petitioner, within

30 days of issue of this order.

87. In view of the above decision, no O&M Expenses are allowable for the transmission assets covered in the instant petition. Interest on Working Capital (IWC)

88. Regulations 34(1)(c), 34(3), 34(4) and 3(7) of the 2019 Tariff Regulations provide as under:

34. Interest on Working Capital: (1) The working capital shall cover: (c) For Hydro Generating Station (including Pumped Storage Hydro Generating Station) and Transmission System:

(i) Receivables equivalent to 45 days of annual fixed cost;

(ii) Maintenance spares @ 15% of operation and maintenance expenses including security expenses; and

(iii) Operation and maintenance expenses, including security expenses for one month. (3) Rate of interest on working capital shall be on normative basis and shall be considered as the bank rate as on 1.4.2019 or as on 1st April of the year during the tariff period 2019-24 in which the generating station or a unit thereof or the transmission system including communication system or element thereof, as the case may be, is declared under commercial operation, whichever is later: Provided that in case of truing-up, the rate of interest on working capital shall be considered at bank rate as on 1st April of each of the financial year during the tariff period 2019-24. (4) Interest on working capital shall be payable on normative basis notwithstanding that the generating company or the transmission licensee has not taken loan for working capital from any outside agency.

3. Definition - In these regulations, unless the context otherwise requires:- (7) Bank Rate means the one year marginal cost of lending rate (MCLR) of the State Bank of India issued from time to time plus 350 basis points;

89. The Petitioner has submitted that it has computed IWC for the 2019-24 tariff period considering the bank rate as on 1.4.2019. Order in Petition No.76/TT/2020 Page 49 of 54

90. IWC is worked out in accordance with Regulation 34 of the 2019 Tariff Regulations. The Rate of IWC considered is 12.05% (SBI 1-year MCLR applicable as on 1.4.2019 of 8.55% plus 350 basis points) for 2019-20, whereas, rate of IWC for 2020-21 onwards has been considered as 11.25% (SBI 1-year MCLR applicable as on 1.4.2020 of 7.75% plus 350 basis points). The components of the working capital and interest thereon allowed for the Combined Asset for the 2019-24 are as under: ( in lakh) Combined Asset Particulars 2019-20 2020-21 2021-22 2022-23 2023-24 O & M Expenses 0.00 0.00 0.00 0.00 0.00 Maintenance Spares 0.00 0.00 0.00 0.00 0.00 Receivables 109.22 105.82 102.24 98.68 94.85 Total Working Capital 109.22 105.82 102.24 98.68 94.85 Rate of Interest (%) 12.05 11.25 11.25 11.25 11.25 Interest on Working Capital 13.16 11.90 11.50 11.10 10.67 Annual Fixed Charges for the 2019-24 Tariff Period

91. The annual fixed charges allowed for the Combined Asset for the 2019-24 tariff period are as under: ( in lakh) Particulars 2019-20 2020-21 2021-22 2022-23 2023-24 Depreciation 324.62 324.62 324.62 324.62 324.62 Interest on Loan 204.18 175.42 146.78 118.28 89.74 Return on Equity 346.38 346.38 346.38 346.38 346.38 Int. on Working Capital 13.16 11.90 11.50 11.10 10.67 Op. and Maintenance 0.00 0.00 0.00 0.00 0.00 Total 888.34 858.33 829.28 800.39 771.41 Filing Fee and Publication Expenses

92. The Petitioner has sought reimbursement of fee paid by it for filing the petition and publication expenses.

93. BSPHCL has submitted that grant of filing fee and expenses incurred are the discretion of the Commission and need not necessarily be allowed in all cases. In response to the same the Petitioner has submitted that in order dated 28.3.2016 in Order in Petition No.76/TT/2020 Page 50 of 54 Petition No. 137/TT/2015, the Commission allowed the recovery of petition filing fee and publication of notices from the beneficiaries on pro-rata basis.

94. We have considered the submissions of the Petitioner and BSPHCL. The Petitioner shall be entitled for reimbursement of the filing fees and publication expenses in connection with the present petition, directly from the beneficiaries on pro-rata basis in accordance with Regulation 70(1) of the 2019 Tariff Regulations. Licence Fee and RLDC Fees and Charges

95. The Petitioner shall be entitled for reimbursement of licence fee in accordance with Regulation 70(4) of the 2019 Tariff Regulations for the 2019-24 tariff period. The Petitioner shall also be entitled for recovery of RLDC fee and charges in accordance with Regulations 70(3) of the 2019 Tariff Regulations for the 2019-24 tariff period. Goods and Services Tax

96. The Petitioner has sought to recover GST on transmission charges separately from the Respondents, if at any time GST on transmission is withdrawn from negative list in future. BSPHCL has submitted that Regulation 56 of the 2019 Tariff Regulations contemplates recovery of statutory charges by generating company and not by transmission licensee and therefore, such claim is liable to be rejected. In response to the same, the Petitioner has submitted that currently transmission of electricity by an electric transmission utility is exempt from GST.

97. We have considered the submissions of the Petitioner and BSPHCL. Since, GST is not levied on transmission service at present, we are of the view that Petitioners prayer is premature. Security Expenses Order in Petition No.76/TT/2020 Page 51 of 54

98. The Petitioner has submitted that security expenses for the instant assets are not claimed in the instant petition and it would file a separate petition for claiming the overall security expenses and the consequential IWC. The Petitioner has requested to consider the actual security expenses incurred during 2018-19 for claiming estimated security expenses for 2019-20 which shall be subject to true up at the end of the year based on the actuals. The Petitioner has submitted that a similar petition for security expenses for 2020-21, 2021-22, 2022-23 and 2023-24 shall be filed on yearly basis on the basis of the actual expenses of previous year subject to true up at the end of the year on actual expenses. The Petitioner has submitted that the difference, if any, between the estimated security expenses and actual security expenses as per the audited accounts may be allowed to be recovered from the beneficiaries on yearly basis.

99. We have considered the submissions of the Petitioner. We are of the view that the Petitioner should claim security expenses for all the transmission assets in one petition. It is observed that the Petitioner has already filed Petition No. 260/MP/2020 claiming consolidated security expenses on projected basis for the 2019-24 tariff period on the basis of actual security expenses incurred in 2018-19. Therefore, security expenses will be dealt with in Petition No. 260/MP/2020 in accordance with the applicable provisions of the 2019 Tariff Regulations. Capital Spares

100. The Petitioner has sought reimbursement of capital spares at the end of tariff period. The Petitioners claim, if any, shall be dealt with in accordance with the provisions of the 2019 Tariff Regulations. Order in Petition No.76/TT/2020 Page 52 of 54 Sharing of Transmission Charges

101. The billing, collection and disbursement of the transmission charges approved in this order shall be governed by the provisions of Central Electricity Regulatory Commission (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2010, as amended from time to time as provided in Regulation 43 of 2014 Tariff Regulations for the 2014-19 tariff period and Regulation 57 of the 2019 Tariff Regulations for the 2019-24 tariff period.

102. To summarise, the trued-up Annual Fixed Charges allowed for the instant assets for the 2014-19 tariff period are as under: ( in lakh) Particular Asset 2014-15 2015-16 2016-17 2017-18 2018-19 Annual Fixed Charges Combined Asset-A 882.98 903.07 905.11 880.28 861.70 Asset-B - 39.98 (Pro-rata for 347 days) 72.03 72.07 71.22

103. The Annual Fixed Charges allowed for the Combined Asset for the 2019-24 tariff period in this order are as under: ( in lakh) Particular 2019-20 2020-21 2021-22 2022-23 2023-24 Annual Fixed Charges Combined Asset 888.34 858.33 829.28 800.39 771.41

104. This order disposes of Petition No. 76/TT/2020. (Arun Goyal) (I.S. Jha) (P. K. Pujari) Member Member Chairperson Order in Petition No.76/TT/2020 Page 53 of 54 Annexure-I Combined Asset A 2014-19 Capital Expendi- ture as on COD ( in lakh) Additional Capitalization ( in lakh) Admitted Capital Cost as on 31.3.2019 ( in lakh) Rate of Depreciation (%) Annual Depreciation as per Regulations ( in lakh) 2014-15 2015-16 2016- 2018- 2014-15 2015-16 2016-17 2017-18 2018-19 Land 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Station 5043.95 224.99 292.32 45.94 90.00 5697.20 5.28 272.26 285.92 294.85 296.06 298.44 Total 5043.95 224.99 292.32 45.94 90.00 5697.20 272.26 285.92 294.85 296.06 298.44 Average Gross Block ( in lakh) 5156.4 5415.1 5584.2 5607.2 5652.2 Weighted Average Rate of Depreciation 5.28 5.28 5.28 5.28 5.28 Asset-B 2014-19 Capital Expenditure as on COD ( in lakh) Additional Capitalization ( in lakh) Admitted Capital Cost as on 31.3.2019 ( in lakh) Rate of Depreciation (%) Annual Depreciation as per Regulations ( in lakh) 2015-16 2016- 2017- 2018- 2015-16 2016-17 2017-18 2018-19 Sub Station 78.45 307.91 44.96 4.28 15.37 450.97 5.28 11.63 21.59 22.89 23.41 Total 78.45 307.91 44.96 4.28 15.37 450.97 11.63 21.59 22.89 23.41 Average Gross Block ( in lakh) 232.41 408.84 433.46 443.29 Weighted Average Rate of Depreciation (%) 5.28 5.28 5.28 5.28 Order in Petition No.76/TT/2020 Page 54 of 54 Annexure-II Combined Asset 2019-24 Combined Admitted Capital Cost as on 1.4.2019 ( in lakh) Additional Capitalization ( in lakh) Admitted Capital Cost as on 31.3.2024 ( in lakh) Rate of Depreciation as per Regulations Annual Depreciation as per Regulations ( in lakh) 2019-24 2019-20 2020-21 2021-22 2022-23 2023-24 Sub Station 6148.17 0.00 6148.17 5.28% 324.62 324.62 324.62 324.62 324.62 TOTAL 6148.17 0.00 6148.17 324.62 324.62 324.62 324.62 324.62 Average Gross Block ( in lakh) 6148.17 6148.17 6148.17 6148.17 6148.17 Weighted Average Rate of Depreciation (%) 5.28 5.28 5.28 5.28 5.28