The Petitioner, National Load Dispatch Centre (hereinafter referred to as NLDC), has filed the present petition under Section 28(4) of the Electricity Act, 2003 (hereinafter referred to as the Act) read with Regulations 6 and 29 of the Central Electricity Regulatory Commission (Fees and Charges of Regional Load Dispatch Centre and other related matters) Regulations, 2015 (hereinafter referred to as the Fees and Charges Regulations 2015) for approval of Performance Linked Incentive (hereinafter referred to as PLI) for NLDC for the financial year 2018-19 of the control period 2014-19. Submissions by the Petitioner:

2. The Petitioner, NLDC has submitted the following:

a) As per clauses 29(1), 29(2) and 29(3) of the Fees and Charges Regulations 2015, the recovery of performance linked incentive by NLDC (National Load Dispatch Center) and RLDCs (Regional Load Dispatch Centers) shall be based on the achievement of key performance indicators (hereinafter also referred to as KPI) as specified in Appendix V of the Fees and Charges Regulations 2015 or other such parameters as specified by the Commission.

b) As per clause 29(6) of the Fees and Charges Regulations 2015, RLDCs/ NLDC are required to compute the KPIs on annual basis for the previous year ending 31st March and to submit the same to the Commission for approval as per Appendix-V and VI of these Regulations. Order in Petition No. 68/MP/2020 Page 35

c) As per the methodology specified in Appendix-V and VI of the Fees and Charges Regulations 2015, NLDC has computed the Key Performance Indicators for the financial year (FY) 2018-19 ending 31st March 2019. Sum of marks under various KPIs claimed by NLDC is 97.961 for FY 2018-19.

d) As per the methodology provided in the Regulation 29(5) of the Fees and Charges Regulations 2015, NLDC is allowed to recover 7% of annual charges for aggregate performance level of 90%. The incentive is increased by 1% of annual charges for every 5% increase of performance level above 90%.

e) Further, the Commission in its Order dated 10.06.2019 in Petition No. 344/MP/2018 has decided as under: .in exercise of provisions of Power to Relax under Regulation 35 of Fees and Charges Regulations, 2015 we hereby relax Regulation 29(5) of Fees and Charges Regulations, 2015 and direct that RLDCs or NLDC, as the case may be, shall be allowed to recover incentive of 15% of annual charges post implementation of pay revision w.e.f 1.1.2017 subject to ceiling as per DPE Guidelines in place of 7%, keeping other provisions of Regulation 29(5) same. In case of shortfall as per DPE Guideline, the balance amount shall be paid from the LDCD fund

3. Accordingly, as per the Petitioner, recovery of Performance Linked Incentive comes at 16.592% for aggregate performance of 97.961% as in the following table (for 90-95% additional 1% and for 95% to 97.961% additional 0.592%) of the Annual charges for the year 2018-19: Score Slabs >85% 90-95 % 95-97.961 % % age Incentive (Slab wise) 7 1 0.592 As Per Order in 344/M/2018 15 1 0.592 Net Incentive as %age of Annual Charges 16.592

4. Against the above background, the Petitioner has filed the present petition with the following prayers: Order in Petition No. 68/MP/2020 Page 36

a) Approve the proposed performance linked incentive based on the KPIs computed by NLDC for the year ending 31.03.2019, the KPI score and PRP percentage of Annual Charges of the year 2018-19.

b) Allow the Applicant to recover the fund for PLI from the users for the year 2018-19.

c) Pass such other order as the Commission deems fit and appropriate in this case and in the interest of justice.

5. The Petition was heard on 25.2.2020 and notices were issued to the Respondents to file their replies. However, none of the Respondents had filed any reply. The Commission vide ROP (Record of Proceedings) of the hearing sought the following additional information from the Petitioner: (a) Detailed note on methodology followed by POSOCO as per DPE OM dated 3.8.2017, for yearly Performance Linked Incentive claimed/recovered from Users; (b) As per above methodology, detailed calculations showing limiting amount as per DPE OM and its annexures, with Audited Actual data for 2014-18 period for performance Linked Incentive; and (c) Annual Reports/Financial Statements for the year 2018-19.

6. The Petitioner vide affidavit dated 16.3.2020 has submitted the aforementioned information. Petitioner has submitted the PRP (performance related pay) as paid and PRP payable as per OM (office memorandum) dated 3.8.2017 of the Department of Public Enterprises, Government of India (DPE) for the FY 2016-17 and FY 2017-18. Further, the Petitioner has submitted that POSOCO commenced functioning as a separate Schedule-A CPSE (Central Public Sector Enterprise) with effect from 03.01.2017. Prior to that, POSOCO was a wholly owned subsidiary of Power Grid Corporation of India Ltd. (in short, PGCIL). During the financial years 2014-15 and 2015-16, when POSOCO was a subsidiary of PGCIL, all the Order in Petition No. 68/MP/2020 Page 37 calculations of performance linked incentive/ performance related pay (PLI/PRP) and approvals thereof from the competent authority were being taken by PGCIL. As no calculation was made by POSOCO for PRP/PLI payment for these years, same is not available with POSOCO and is, therefore, not submitted. The Petitioner has submitted following figures of PLI/PRP for NLDC: (In Rs. lakh) NLDC 2014-15 2015-16 2016-17 2017-18 Maximum PRP payable as per DPE OM - - 273.38 690.26 PLI actually disbursed/ paid to employees 119.34 184.16 226.18 669.14 PLI recovered from users 260.91 180.74 218.56 481.29

7. The Petition was further heard on 29.5.2020 and on the request of respondent

i.e. UPPCL, the Commission allowed UPPCL to file its reply in the Petition. The Commission vide ROP directed the Petitioner to submit Copy of Board approval on PRP/PLI payments disbursal for each year (2014-15 to 2018-19) paid to the employees.

8. In compliance with directions vide RoP of hearing dated 29.05.2020, the Petitioner vide affidavit dated 23.06.2020, submitted Minutes of Meetings of Nomination and Remuneration Committee of Petitioners Board for the above control period. Submissions by UPPCL Order in Petition No. 68/MP/2020 Page 38

9. The Respondent UPPCL vide affidavit dated 16.6.2020 has submitted as under:

a) Section 28 of the Act deals with the functions of RLDCs and Sub- section (4) of this section 28 of the Act provides that RLDCs may levy and collect such fees and charges from the generating companies or licensees engaged in inter-State transmission of electricity as may be specified by the Commission. NLDC is established under Section 26 of the Act for the purpose of optimum scheduling and dispatch of electricity among RLDCs. However, Section 26 of the Act does not provide for collection of fees and charges by NLDC as has been provided for RLDCs under Section 28 of the Act.

b) The Commission has formulated the Fees and Charges Regulations 2015 under Section 178 of the Act read with Section 28(4) of the Act. Regulation 2 of the Fees and Charges Regulation 2015 deals with the Scope and Extent of The Application and states that these regulations shall be applicable for determination of fees and charges to be collected by RLDCs from generating companies, distribution licensees, inter-State transmission licensees, buyers, sellers and intra-State trading licensees.

c) Thus, there is no enabling provision in the Act for NLDC to levy and collect fees and charges from the generating companies or licensees engaged in inter-State transmission of electricity. However, Fees and Charges Regulations 2015 provides that NLDC may also file petition for approval of fees and charges, but the same is not tenable under the law because the action which is not provided under the principal legislation (i.e. the Act), cannot be provided by any subordinate legislation or rules or regulations made thereunder. As such, this Petition is not maintainable under Sub-section (4) of Section 28 of the Act or the Fees and Charges Regulations 2015.

d) Clause 8 of Regulation 3 of the Fees and Charges Regulations 2015 is regarding charges, which means that recurring payment on monthly basis is to Order in Petition No. 68/MP/2020 Page 39 be collected by RLDC for the services rendered by NLDC, RLDC and POSOCO. Therefore, the present petition deserves dismissal and any of the RLDCs might be allowed to put up the case of determination of incentive attributable to NLDC with a separate petition with due permission to apportion the incentive later among RLDCs for recovery.

e) The Commission vide Order dated 10.06.2019 in Petition No. 344/MP/2018 in exercise of its Power to Relax, changed the rate of recovery of incentive under Regulation 29 of the Fees and Charges Regulation 2015 from 7% to 15%. The Fees and Charges Regulation 2015 was applicable for the control period from 01.04.2014 to 31.03.2019. The Central Electricity Regulatory Commission (Fees and Charges of Regional Load Dispatch Centre and other related matters) Regulations, 2019 (hereinafter referred to as the Fees and Charges Regulation 2019) was notified by the Commission on 05.04.2019 for the control period from 01.04.2019 to 31.03.2024. Once the Fees and Charges Regulation 2019 had come into existence on 5th April 2019, the Fees and Charges Regulation 2015 ceased to have effect from a day before day 5th April 2019. Regulation 29(5) of the Fees and Charges Regulations 2015 cannot be relaxed by Order dated 10.06.2019 in Petition No. 344/MP/2018 because on that day, the Fees and Charges Regulations 2015 was not in existence. Therefore, NLDC is not entitled for recovery of incentive at the rate of 15% of annual charges in place of 7% that was originally provided under Regulation 29(5) of the Fees and Charges Regulations 2015. This incentive even otherwise cannot be allowed since the present petition is not maintainable.

f) Key performance indicators include, among other indicators, Reporting of Inter-connection Meter Error and Reporting of Grid Incident and Grid Disturbance. As per provisions of the Central Electricity Regulatory Commission (Indian Electricity Grid Code) Regulations 2010 (hereinafter referred to as the Grid Code), meter reading & data collection and reporting of meter error is the function of RLDCs. As such, this KPI is not concerned with Order in Petition No. 68/MP/2020 Page 40 the functioning of NLDC and the same cannot be considered for evaluation of performance of NLDC. This KPI may be deleted for the purpose of KPI scores of NLDC for the year 2018-19.

g) KPI-2 is regarding reporting of grid incidents and grid disturbance. The provision under Annexure XIII in this regard is quoted as under:- The Grid Incidents and Grid disturbances are reported by the RLDCs to NLDC on a monthly basis. The same are then compiled and independently verified by National Load Despatch centre. Afterwards the same is reported to the Honble Commission on a monthly basis as a part of Monthly operational report issued by National Load Despatch Centre in accordance to the Indian Electricity Grid Code. As the reporting on Grid incidences and Grid disturbances is generated on monthly basis, target reports to be generated have been considered to be 12% age performance has been measured based on the actual number of reports generated, which has been proportionately converted to marks scored.

h) According to the above quoted provision, the function to report grid incidents and grid disturbances is assigned to RLDC and the role of NLDC is limited to compilation of the same from various RLDCs and submitting the same to the Commission. As such, this KPI is not concerned with the functions of NLDC and the same might not be considered for evaluation of performance of NLDC and should be deleted for the purpose of KPI scores of NLDC for the year 2018-19.

i) Human resource expenses under Regulation 21 of the Fees and Charges Regulations 2015 provides for entitlement of performance related pay computed in accordance with DPE Guidelines to be met through incentive allowed in accordance with Regulation 29(5). This means that expenses towards performance related pay, available to officers/ employees of the Petitioner, are to be sourced from the incentive which the Petitioner would become entitled to under Regulation 29(5) as a percentage of the annual charges. Since incentive is calculated at the end of each year depending on performance level, the amount of incentive would be different from year to year based on actual performance. Therefore, this expense cannot be considered as Order in Petition No. 68/MP/2020 Page 41 a regular ingredient of the human resource expenses and may be deleted under the head human resource expenses.

j) The Petitioner has provided details of human resource expenses for year 2018-19, which includes, among others, productivity linked incentive. According to certificate dated 18.10.2019, the Petitioner had already incurred expenditure of Rs. 132.00 lakh under the head productivity linked incentive and the Petition was filed on 24.12.2019 for its approval. Therefore, the Petitioner is approaching the Commission for post-facto approval as such NLDC may be directed to ensure to incur expenditure only after approval of the Commission. Rejoinder of the Petitioner to reply of UPPCL vide affidavit dated 25.6.2020

10. The Petitioner has filed its rejoinder vide affidavit dated 25.6.2020 to the reply of the Respondent UPPCL and submitted as under:

a) National Load Despatch Centre Rules, 2004 notified on 2nd March 2005, allows NLDC to levy and collect such fee and charges as may be specified by the Commission. Regulation 6 of the Fees and Charges Regulations 2015 provides for NLDC to file application for determination of fees and charges for the Control Period 2014-19.

b) In line with the provisions of the Regulations 21 and 29(5) of the Fee and Charges Regulations, RLDCs and NLDC have been filing Petitions with the Commission to claim the amount payable to the employees towards Performance Related Pay (PRP) computed in accordance with the Guidelines issued by the Department of Public Enterprises from time to time.

c) Subsequent to wage revision in 2017, quantum of Performance Related Pay component of the salary of the CPSE employees has increased significantly. With the quantum allowed in the Fees and Charges Regulations 2015 (7% - 9% of the annual charges), there was a substantial shortfall in the funds required to pay the Performance Related Pay computed in accordance Order in Petition No. 68/MP/2020 Page 42 with the DPE Guidelines. The Ministry of Power vide letter no. 18/2/2015-PG dated 17.03.2016 had also desired suitable amendments/ modifications in the Regulations in order to quantify the kitty available to POSOCO for payment of PRP benefits to its employees. As per the Wage Revision Guidelines dated 3.8.2017 and 4.8.2017 issued by DPE, impact of wage revision including PRP would form part of revenue stream of the company for companies like POSOCO.

d) In accordance with the DPE Guidelines, quantum of PLI/ PRP depends mainly upon the Companys performance on the targets prescribed in the Memorandum of Understanding (MoU) signed between the CPSE and Administrative Ministry. In case of POSOCO, MoU is signed with Ministry of Power and performance against the targets set in the MoU is evaluated at the end of the year by DPE.

e) Accordingly, the Commission vide order dated 10.6.2019 in Petition No. 344/MP/2018 has increased the incentive to 15% - 17% of annual charges.

f) For considering KPI-1 (Reporting of Inter-connection Metering Error) in case of the Petitioner, rationale submitted with the Petition which has been considered by the Commission while approving the PLI applications of previous years also. For arriving at the performance of NLDC, average performance of RLDCs has been considered.

g) Regarding KPI-2, as mentioned and quoted by the Respondent itself, NLDC is performing the assigned function of compiling and independently verifying the data regarding grid incidents and grid disturbances before finally reporting it to the Commission. Therefore, this KPI-2 is a function of NLDC.

h) With regard to the computation of HR expenses for the Control Period 2019-24, expenses incurred on Performance Related Pay (PRP) during the Control Period 2014-19 have not been considered as part of Human Resource Order in Petition No. 68/MP/2020 Page 43 Expenses. PLI shown in the HR expenses during FY 2018-19 is actually provision made towards Certificate Linked Incentive. Same has also been submitted in the additional information submitted to the Commission in compliance of RoP of the hearing held on 25.02.2020 in Petition No 430/MP/2019. Analysis and Decision

11. We have considered all the submissions of the Petitioner and the respondent. Before proceeding further, we consider it appropriate to deal with issue of maintainability of the Petition raised by the Respondent UPPCL.

12. The Respondent No.1, UPPCL has submitted that there is no enabling provision in the Act for NLDC to levy and collect fees and charges from the generating companies or licensees engaged in inter-State transmission of electricity. However, the Fees and Charges Regulations 2015 provides that NLDC may also file petition for approval of Fees and Charges. UPPCL has submitted that the same is not tenable under the law because the action which is not provided under the principal legislation (i.e. the Act), cannot be provided by any subordinate legislation or rules or regulations made thereunder. It has, therefore, prayed that this Petition is not maintainable.

13. Per contra, the Petitioner has submitted that in accordance with the National Load Despatch Centre Rules, 2004 notified on 2.3.2005, NLDC has been allowed to levy and collect such fee and charges as may be specified by the Commission. Order in Petition No. 68/MP/2020 Page 44

14. We have considered the submissions of the Petitioner and the Respondent UPPCL. Relevant excerpt from the National Load Despatch Centre Rules, 2004 provides is as under: (2) Functions of National Load Despatch Centre The National Load Despatch Centre shall be the apex body to ensure integrated operation of the national power system and shall discharge the following functions, namely :-

k) levy and collection of such fee and charges from the generating companies or licensees involved in the power system, as may be specified by the Central Commission. This Rule provides for the Commission to specify levy and collection of such fee and charges from generating companies or licensees involved in the power system in respect of NLDC.

15. Relevant provisions of Regulations 6 and 7 of the Fees and charges Regulations 2015 provide as follows:

6. Application for determination of fees and charges: (1) The RLDCs and NLDC shall make application in the formats annexed as Appendix I to these regulations within 180 days from the date of notification of these Regulations, for determination of fees and charges for the control period, based on capital expenditure incurred and duly certified by the auditor as on 1.4.2014 and projected to be incurred during the control period based on the CAPEX and the REPEX.

7. Determination of Fees and Charges (1) The Fees and Charges shall be determined separately for each of the Regional Load Despatch Centres and National Load Despatch Centre; Provided that the annual charges of NLDC including corporate office expenses for the control period shall be apportioned among Regional Load Despatch Centre on the basis of the peak demand served (in MW) in the respective region as indicated on CEAs website for the preceding year. Order in Petition No. 68/MP/2020 Page 45 These provisions provide for determination of fees and charges for NLDC and also provide that annual charges of NLDC including corporate office expenses shall be apportioned among Regional Load Despatch Centres.

16. Further, Regulation 29(3) of the Fees and Charges Regulations 2015 requires NLDC to submit the details with regard to each Key Performance Indicator in the format specified in Appendix V of the said Regulations. Accordingly, NLDC has filed the instant Petition.

17. Thus, there are clear provisions under the Rules prescribed under the Central Government and the Regulations specified by the Commission for levy and collection of fees and charges for NLDC. The Respondent UPPCL has submitted that Rules or Regulations framed under the Act must conform to provisions of the Act and that in the instant case, the Rules/ Regulations are not covered by any provision of the Act. In other words, the Petitioner has challenged the provisions of the NLDC Rules, 2004 and the Fees and Charges Regulations 2015. In our view, such issues cannot be raised through reply to a petition. UPPCL may raise legality of provisions of Rules/ Regulations in appropriate forum.

18. In view of the above, the objections of UPPCL are rejected and the instant Petition is maintainable.

19. Another preliminary issue raised by UPPCL is regarding order dated 10.06.2019 in Petition No. 344/MP/2018. UPPCL has submitted that the Commission vide the aforesaid Order has relaxed the rate of recovery of incentive under Order in Petition No. 68/MP/2020 Page 46 Regulation 29 of the Fees and Charges Regulation 2015 to 15% compared to earlier provision of only 7%. It has submitted that the Fees and Charges Regulation 2019 had come into existence on 5.4.2019 and that from this date (5.4.2019), the Fees and Charges Regulations 2015 ceased to have effect. It has, therefore, submitted that after expiry of validity of the Fees and Charges Regulation 2015, provisions of Regulation 29(5) cannot be relaxed by the Commission through passing its Order dated 10.6.2019 in Petition No. 344/MP/2018. As per UPPCL, the Fees and Charges Regulations 2015 was not in existence.

20. We have considered the submissions of the Respondent UPPCL. The submissions of the Respondent imply that the order of the Commission dated 10.6.2019 in Petition No. 344/MP/2018 is illegal. UPPCL has argued that the Fees and Charges Regulations 2015 was not valid on the date of the order i.e. on 10.6.2019. In view of UPPCL, once the Fees and Charges Regulations 2019 came into force on 5.4.2019, the Fees and Charges Regulations 2015 ceased to exist. We observe that the Petitioner i.e. NRLDC had approached the Commission vide Petition No. 344/MP/2018 that was filed on 8.11.2018 for change in the rate of incentive allowable, post pay revision effective from 3.1.2017 for balance period within 2014-19 control period. The Commission vide Order dated 10.6.2019 allowed such change in the rate of incentive from 7% to 15%, for period starting from 3.1.2017 till end of control period (2014-19).

21. Relevant provisions of the Fees and Charges Regulations 2015 related to its validity are extracted as under: Order in Petition No. 68/MP/2020 Page 47

1. Short title and commencement. (2) These regulations shall come into force from the date of their publication in the Official Gazette, and unless reviewed earlier or extended by the Commission, shall be applicable during the control period from 1.4.2014 to 31.3.2019.

3. Definitions. (11) Control period means a period of five years starting from 1.4.2014;

6. Application for determination of fees and charges: (8) During pendency of the application, the applicant shall continue to bill the users on the basis of fees and charges approved by the Commission during previous control period and applicable as on 31.3.2014, for the period starting from 1.4.2014 till approval of the Fees and Charges by the Commission, in accordance with these Regulations

22. Similarly, relevant provisions of the Fees and Charges Regulations 2019 related to its validity are extracted as under:

1. Short title and commencement (2) These regulations shall come into effect from the date of their publication in the Official Gazette, and unless reviewed earlier or extended by the Commission, shall be applicable during the control period from 1.4.2019 to 31.3.2024.

3. Definitions: In these regulations, unless the context otherwise requires: (13) Control Period means a period of five years starting from 1.4.2019;

10. Application for determination of fees and charges (8) During pendency of the application, the applicant shall continue to bill the users on the basis of fees and charges approved by the Commission during previous control period and applicable as on 31.3.2019, for the period starting from 1.4.2019 till approval of the Fees and Charges by the Commission, in accordance with these Regulations. This shall be subject to true up as approved by the Commission for the Control Period 2019-2024.

23. We note that the Fees and Charges Regulations 2015 and the Fees and Charges Regulations 2019 are similarly worded as regards control period and applicability of regulations. While the former deals with 2014-19 control period, the latter is for 2019-24 control period. Thus, the Fees and Charges Regulations 2015 is applicable for the years, 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19 and for this period, the Fees and Charges Regulations 2019 are not applicable.. There is no overlap in period of applicability of the two regulations and the date of notification of regulations has no bearing on the period for which they are applicable. Order in Petition No. 68/MP/2020 Page 48

24. The order dated 10.6.2019 in Petition No. 344/MP/2018 was issued by the Commission for the 2017-18 onwards of the 2014-19 control period. Irrespective of the Fees and Charges Regulations having been notified on 5.4.2019, it is the Fees and Charges Regulations 2015 that would be applicable for 2017-18 and 2018-19. Therefore, the contention of UPPCL that after notification of the Fees and Charges Regulations 2019, the issuing of order dated 10.6.2019 in Petition No. 344/MP/2018 under the Fees and Charges Regulations 2015 is incorrect, is without any basis and is, therefore, rejected.

25. Also, if the Respondent UPPCL was not satisfied with the order dated 10.6.2019 in Petition No. 344/MP/2018, it could have taken recourse to legal remedies available to it such as review of the order or appeal against the order. Not having done so, it cannot raise this issue now in this Petition.

26. Having dealt with issue of maintainability and preliminary objection, the following issues need our consideration:

a) Whether Performance Linked Incentive (PLI) can be considered a component of HR Expenses?

b) Allowable Performance Linked Incentive (PLI) depending upon the KPIs worked out for the Petitioner.

27. The above mentioned key issues are dealt in the succeeding paragraphs one by one.

a) Whether Performance Linked Incentive (PLI) can be considered a component of HR Expenses? Order in Petition No. 68/MP/2020 Page 49

28. UPPCL has submitted that the Petitioner has provided details of human resource (HR) expenses for year 2018-19, which include, among others, productivity linked incentive. According to the auditors certificate dated 18.10.2019, the Petitioner has incurred expenditure of Rs. 132.00 lakh under the head Productivity Linked Incentive. UPPCL submitted that the said productivity linked incentive cannot be covered under the HR expenses and, therefore, this expense may be deleted under the head human resource expenses.

29. In response, the Petitioner has submitted that the Productivity Linked Incentive shown in the HR expenses during FY 2018-19 is actually provision made towards Certificate Linked Incentive and it is not Performance Linked Incentive (PLI).

30. In view of the clarification provided by the Petitioner, it is clear that Performance Linked Incentive (PLI) is not a part of HR Expenses of the Petitioner.

b) Allowable Performance Linked Incentive (PLI) depending upon the KPIs worked out for the Petitioner.

31. The present petition has been filed under Regulations 6 and 29 of the Fees and Charges Regulations 2015 for approval of Performance Linked Incentive for the financial year 2018-19. Regulations 6 and 29 of the Fees and Charges Regulations 2015 are extracted as under:

6. Application for determination of fees and charges: (1) The RLDCs and NLDC shall make application in the formats annexed as Appendix I to these regulations within 180 days from the date of notification of these Regulations, for determination of fees and charges for the control period, based on capital expenditure incurred and duly certified by the auditor as on 1.4.2014 and projected to be incurred during the control period based on the CAPEX and the REPEX. Order in Petition No. 68/MP/2020 Page 50 (2) The application shall contain particulars such as source of funds, equipments proposed to be replaced, details of assets written off, and details of assets to be capitalized etc. (3) Before making the application, the concerned RLDC or NLDC, as the case may be, shall serve a copy of the application on the users and submit proof of service along with the application. The concerned RLDC or NLDC shall also keep the complete application posted on its website till the disposal of its petition. (4) The concerned RLDC or NLDC, as the case may be, shall within 7 days after making the application, publish a notice of the application in at least two daily newspapers, one in English language and one in Indian modern language, having circulation in each of the States or Union Territories where the users are situated, in the same language as of the daily newspaper in which the notice of the application is published, in the formats given in Appendix II to these regulations. (5) The concerned RLDC or NLDC, as the case may be, shall be allowed the fees and charges by the Commission based on the capital expenditure incurred as on 1.4.2014 and projected to be incurred during control period on the basis of CAPEX and REPEX duly certified by the auditor in accordance with these Regulations: Provided that the application shall contain details of underlying assumptions and justification for the capital expenditure incurred and the expenditure proposed to be incurred in accordance with the CAPEX and REPEX. (6) If the application is inadequate in any respect as required under Appendix-I of these regulations, the application shall be returned to the concerned RLDC or NLDC for resubmission of the petition within one month after rectifying the deficiencies as may be pointed out by the staff of the Commission. (7) If the information furnished in the petition is in accordance with the regulations and is adequate for carrying out prudence check of the claims made the Commission shall consider the suggestions and objections, if any, received from the respondents and any other person including the consumers or consumer associations. The Commission shall issue order determining the fees and charges order after hearing the petitioner, the respondents and any other person permitted by the Commission. (8) During pendency of the application, the applicant shall continue to bill the users on the basis of fees and charges approved by the Commission during previous control period and applicable as on 31.3.2014, for the period starting from 1.4.2014 till approval of the Fees and Charges by the Commission, in accordance with these Regulations. (9) After expiry of the control period, the applicant shall continue to bill the users on the basis of fees and charges approved by the Commission and applicable as Order in Petition No. 68/MP/2020 Page 51 on 31.3.2019 for the period starting from 1.4.2019 till approval of fees and charges under the applicable regulations.

29. Performance linked incentive to RLDCs and NLDC: (1) Recovery of incentive by the Regional Load Despatch Centre shall be based on the achievement of the Key Performance Indicators as specified in Appendix V or such other parameters as may be prescribed by the Commission. (2) Each Regional Load Despatch Centre shall submit its actual performance against each of the key performance indicators to the Commission on annual basis as per the format specified in Appendix V. (3) NLDC shall submit the details in regards to each Key Performance Indicator in the format specified in Appendix V along with the methodology for approval of the Commission. (4) The Commission shall evaluate the overall performance of the RLDCs or NLDC, as the case may be, on the basis of weightage specified in Appendix V. The Commission, if required, may seek advice of the Central Electricity Authority for evaluation of the performance of system operator. (5) The RLDCs or NLDC, as the case may be, shall be allowed to recover incentive of 7% of annual charges for aggregate performance level of 85% for three years commencing from 1.4.2014 and for aggregate performance level of 90% from 1.4.2017. The incentive shall increase by 1% of annual charges for every 5% increase of performance level above 90%: Provided that incentive shall be reduced by 1% of annual charges on prorata basis for the every 3% decrease in performance level below 85%. (6) The RLDCs or NLDC, as the case may be, shall compute the Key Performance Indicators on annual basis for the previous year ending on 31st March and submit to the Commission along with petitions for approval of the Commission as per Appendix V and Appendix VI of these Regulations: Provided that the key performance indicators of previous year ending on 31st March shall be considered to recover incentive on each year and shall be trued up at the end of the control period.

32. As per methodology specified in Appendix-V of the Fees and Charges Regulations 2015, KPI score for NLDC for the year 2018-19 has been submitted by the Petitioner as under: Order in Petition No. 68/MP/2020 Page 52 Key Performance Indicators Weightage Previous Year (2017-18) Current Year (2018-19)

1 Reporting of Interconnection meter error

10 10.00 10.00

2 Reporting of Grid Incidents and Grid Disturbance

10 10.00 10.00

3 Average processing time of shut down request

10 10.00 10.00

4 Availability of SCADA System 10 9.990 9.996

5 Voltage Deviation Index (VDI) 10 10.00 10.00

6 Frequency Deviation Index (FDI) 10 10.00 10.00

7 Reporting of System Reliability 10 10.00 10.00

8 Availability of Website 10 9.971 9.999

9 Availability of Standby Supply 5 5.00 5.00

10 Variance of Capital expenditure 5 3.779 3.815

11 Variance of Non Capital expenditure 5 3.945 4.978

12 Percentage of Certified Employee 5 4.615 4.173 Total 100 97.300 97.961

33. We have considered the Petitioners claim for Performance Linked Incentive (PLI). The Petitioner has submitted that the Commission has notified various performance indicators and their weightage for the determination of fees and charges in the Fees and Charges Regulations 2015 and performance on these KPIs has been quantified to make it measurable. The Petitioner has submitted KPI wise details which have been dealt with in the succeeding paragraphs: KPI-1: Reporting of Interconnection metering error

34. The Petitioner has submitted that the meter readings are processed on weekly basis and an error could only be detected after processing the same and after going through the validation process. RLDCs are reporting the meter errors on weekly basis. These are made available on RLDC websites as per the provisions in the Regulations. Hence, the possible no. of reports in a year is 52 which have been Order in Petition No. 68/MP/2020 Page 53 converted to percentage based on the actual reporting. The percentage performance has been proportionately converted to marks scored. The Petitioner has submitted that problems related to meters including those installed at inter-regional/ international tie points are being reported by concerned RLDCs to the utilities for corrective action.

35. Further, it is submitted by the Petitioner that as per Regulation 2.3.2 of the Grid Code, RLDCs are responsible for meter data processing. Regulations 2.3.2 of Grid Code is reproduced below: 2.3.2 The following are contemplated as exclusive functions of RLDCs (a) System operation and control including inter-state transfer of power, covering contingency analysis and operational planning on real time basis; (b) Scheduling / re-scheduling of generation; (c) System restoration following grid disturbances; (d) Metering and data collection; (e) Compiling and furnishing data pertaining to system operation; (f) Operation of regional UI pool account, regional reactive energy account and congestion Charge Account, provided that such functions will be undertaken by any entity (ies) other than RLDCs if the Commission so directs. (g) Operation of ancillary services.

36. Respondent UPPCL has submitted that since metering and data collection is sole responsibility of RLDCs as per the Grid Code, this KPI may be deleted for the purpose of KPI scores of NLDC for the year 2018-19. The Petitioner vide its rejoinder to the reply of UPPCL submitted that the rationale submitted with the Petition has been considered by the Commission while approving granting PLI in previous years also. The Petitioner has submitted that for arriving at the performance of NLDC, average performance of RLDCs has been considered. Order in Petition No. 68/MP/2020 Page 54

37. Relevant extract from Regulation 29(3) of the Fees and Charges Regulations 2015 is extracted as under:

29. Performance linked incentive to RLDCs and NLDC: (3) NLDC shall submit the details in regards to each Key Performance Indicator in the format specified in Appendix V alongwith the methodology for approval of the Commission.

38. We note that Appendix V includes Interconnection Meter Error as the KPI for NLDC also. Further NLDC has been proposing average performance of RLDCs under the said KPI which has been approved by the Commission for years 2014- 2018. Accordingly the same methodology, i.e average performance of RLDCs shall be considered for the year 2018-19 also.

39. The total weightage of parameter KPI-1 ("reporting of Inter-connection metering error") is 10 and the Petitioner has claimed performance during the financial year 2018-19 as average performance of RLDCs, which are as follows: RLDC Petition No. Performance during 2018-19 Marks scored in proportion to Performance during 2018-19 NRLDC 185/MP/2020 100% 10 WRLDC 160/MP/2020 100% 10 SRLDC 184/MP/2020 100% 10 ERLDC 159/MP/2020 100% 10 NERLDC 186/MP/2020 100% 10

40. The Petitioner has worked out the average of marks scored by the five (5) RLDCs mentioned in table above as 10. Accordingly, the weightage factor for reporting of inter-connection meter error is approved as 10. KPI-2: Reporting of Grid Incidents and Grid Disturbance Order in Petition No. 68/MP/2020 Page 55

41. The Petitioner has submitted that grid incidents and grid disturbances are reported by the RLDCs to NLDC on monthly basis. The same are then compiled and independently verified by NLDC. Afterwards the same is reported to the Commission on a monthly basis as a part of monthly operational report issued by NLDC in accordance with the Grid Code. As the reporting on grid incidents and grid disturbances are generated on monthly basis, target reports to be generated have been considered to be 12. Percentage performance has been measured based on the actual number of reports generated, which has been proportionately converted to marks scored.

42. The Petitioner has submitted that as against the total weightage of 10 for parameter reporting of grid incidents and grid disturbance, actual incidents of such events during the financial year 2018-19 are as under: FY-2018-19 Category* Count (Nos.) Recovery Period (HH:MM:SS) Loss of Energy (MUs) GI-1 118 252:29:00 4.20 GI-2 355 1144:02:00 5.60 GD-1 453 1048:01:00 36.04 GD-2 2 0:24:00 0.05 GD-3 1 0:35:00 0.24 GD-4 0 0:00:00 0.00 GD-5 0 0:00:00 0.00 All 929 2445:31:00 46.14

43. Further the Petitioner has submitted that a copy of the report is also available in public domain on POSOCO website (https://posoco.in/reports/monthly- Order in Petition No. 68/MP/2020 Page 56 reports/monthly-reports-2018-19/). The details for the report for the Financial Year 2018 19 are as follows: Sl. No. Month Date of Reporting

1 April 2018 23rd May 2018

2 May 2018 22nd June 2018

3 June 2018 23rd July 2018

4 July 2018 23rd August 2018

5 August 2018 23rd September 2018

6 September 2018 23rd October 2018

7 October 2018 22nd November 2018

8 November 2018 21st December 2018

9 December 2018 23rd January 2019

10 January 2019 22nd February 2019

11 February 2019 22nd March 2019

12 March 2019 23rd April 2019

44. The Petitioner has submitted performance-wise details as under: Performance during FY 2018-19 (In %)*= 100.00 Marks Scored (In proportion of the %age performance above) 10.00 *Formula for performance calculation: (No. of monthly reports issued / 12 )*100

45. The Respondent UPPCL has submitted that the function to report grid incidents and grid disturbances is assigned to RLDC and the role of NLDC is limited to compilation of the same from various RLDCs and submitting the same to the Commission. As such, this KPI is not concerned with the functions of NLDC and the same might not be considered for evaluation of performance of NLDC.

46. The Petitioner vide its rejoinder has submitted that NLDC is performing the assigned function of compiling and independently verifying the data regarding grid Order in Petition No. 68/MP/2020 Page 57 incidents and grid disturbances before finally reporting it to the Commission. Therefore, this KPI is a function of NLDC.

47. We have considered the submissions of the Petitioner and Respondents. Perusal of the above reveals that the Petitioner is reporting incident of grid disturbance each month to the Commission after compiling and independently verifying the data regarding grid incidents and grid disturbances. Accordingly, as per Appendix VI of the Fees and Charges Regulations 2015, the weightage for reporting of grid incidents and grid disturbance is considered 10 out of 10. KPI-3: Average Processing time of shut down request

48. The Petitioner has submitted that the shutdown process, uniform across all the RLDCs, has been discussed and approved at RPC level. Time allowed to NLDC for approval of the shut-down requests is 26 hours and to RLDCs, it is 50 hours (including time of 26 hours for NLDC). This methodology has been devised considering primarily the planned outages approved in the monthly OCC meetings of RPCs which are processed by RLDCs on D-3 basis (3-day ahead of actual day of outage) based on confirmation from the shutdown requesting agency and the then prevailing grid conditions. It has submitted that the procedure to streamline the process of transmission outage coordination between SLDCs, RLDCs, NLDC, RPCs and Indenting Agencies was developed by NLDC in 2013 and approved in OCC fora. The Petitioner has submitted that as per the approved process, RLDC approves the shutdown requests of inter-State transmission lines and NLDC approves the shutdown requests for inter-regional and 765 kV transmission lines. Order in Petition No. 68/MP/2020 Page 58

49. Further, the Petitioner submitted that the RLDCs after processing the shut down requests at regional level forward the list to NLDC for impact assessment at national level. After clearance from NLDC, the final list of cleared shut down requests are intimated by respective RLDCs to the requesting agencies on D-1 (i.e. one day ahead of the proposed date of outage).

50. As per outage planning procedure, shutdown processing time for NLDC/RLDCs is as tabulated below: Sl No Activity Day Time

1 Request of shutdown from indenting agency to concerned RLDC. D-3 1000 hrs

2 Forwarding request of shutdown requiring NLDC approval from RLDC to other concerned RLDCs and NLDC (along with the recommendations and study result) D-2 1000 hrs

3 Comments of other RLDCs or NLDC D-2 1600 hrs

4 Approval or Rejection of Request D-1 1200 hrs Shutdown Processing Time for NLDC is Calculated as : Sr.No(4)- Sr.No(2)= 26 hrs Shutdown Processing Time for RLDC is Calculated as : Sr.No(4)- Sr.No(1)= 50 hrs

51. The weightage for the parameter average processing time of shut down request is 10. The Petitioner has submitted average processing time of shut down request during the financial year 2018-19 as under: S. No. Month Total No of shutdown requests in a month(B) Total time (hrs) taken to approve the shutdown in a month (A) Total time (hrs)taken to approve the shutdown in a month /Total No of shutdown requests in a month (C=A/B) Order in Petition No. 68/MP/2020 Page 59

52. The Petitioner has submitted that as per the above table, the average time taken by NLDC, during the year 2018-19, to approve the shutdown is 18.82 hours, which is lesser than 26 hours as approved. This conclusion is substantiated by the formula described below:

53. We have considered the submission of the Petitioner. As per Appendix VI of the Fees and Charges Regulations 2015, weightage for average processing time of shut down request by the Petitioner is considered as 10 out of 10. Apr18 117 2628 22.46 May'18 83 1608 19.37 June'18 86 1604 18.65 July'18 126 2226 17.66 Aug'18 85 1703 20.04 Sept'18 91 1774 19.49 Oct'18 100 1836 18.36 Nov'18 128 2237 17.48 Dec'18 92 1607 17.47 Jan'19 89 1920 21.57 Feb'19 108 1882 17.43 Mar'19 102 1687 16.54 Total 1207 22712 18.82 Performance during FY 2018-

19 (In %)*: 100.00 Marks Scored (In proportion of the %age performance above) 10.00 *Formula for performance calculation: IF((A-B*26)>0, (1-(A- B*26)/(B*26))*100,100) Order in Petition No. 68/MP/2020 Page 60 KPI-4: Availability of SCADA,

54. The Petitioner has submitted the following regarding the availability of SCADA:

a) SCADA systems installed in RLDCs and NLDC is a collection of software and hardware modules which provide essential functions like (i) real time data reporting from field, (ii) real time data exchange between various Load Despatch centres, (iii) historical data archiving & retrieving, (iv) network analysis studies, (v) grid dispatcher training, (vi) document management system, and

(vii) MIS reporting.

b) SCADA system at NLDC acquires real time data from RLDCs through dedicated communication links either on communication network implemented through Unified Load Despatch & Communication Scheme (ULDC) or through POWERTEL (communication network provided by the CTU).

c) SCADA system at RLDC acquires real time data from Remote Terminal Unit (RTU)/ Sub-Station Automation System (SAS) for central sector stations and IPP stations installed in respective Region through ULDC communication network (in case, ULDC link is not available, POWERTEL is used). Real time data from various SLDCs of the Region is fetched through ICCP protocol on dedicated communication links provided through ULDC network with redundancy and POWERTEL.

d) The main reasons of outages of real-time data are listed below:

1. Failure of critical SCADA servers (hardware level)

2. Failure of critical SCADA applications (software level)

3. Communication failure

e) Critical infrastructure of SCADA is redundant at server and network level to ensure standby operation and availability in case of any contingency. In case, data at Main control centre is not available, Back-up control centre is utilized to visualize the real-time data. Order in Petition No. 68/MP/2020 Page 61

f) SCADA systems are covered under long term maintenance contract by System Integrator/ OEM having financial implications in case of outages even in the component level. The System Integrator is required to attend the issues as per timelines defined in the maintenance contract, failing which a portion of the maintenance charges can be deducted as penalty. Records of all incidences are maintained along with resolution details. Measures for maintenance contract have been kept stringent so that it does not affect the overall SCADA system availability to the grid operators. The records for KPI are generated in line with above philosophy.

g) Both Main and Back-up SCADA systems have two SCADA servers working in redundant mode with one of the servers in master role and the other in standby role. Consequently, services of SCADA system is considered available when at least one of the redundant servers is up. In the event of failure of both the SCADA servers at Main control centre (CC), monitoring of regional grid can be done through SCADA system of Backup. Accordingly, for the purpose of computation of SCADA availability, the status of main and standby SCADA servers at Main and Backup control centres is checked. If any one of the servers is working at any instant and real time SCADA data is available to the control room, SCADA system is considered to be available.

h) SCADA system at Main and Backup control centres is checked for healthiness on daily basis based on server logs and system alarms of SCADA system in hardware and software levels. Daily check on healthiness of SCADA system components such as servers, networks, and processes etc. is made by the system integrator and kept in record.

i) There are different levels of severities depending upon the criticality of the failures. Loss of SCADA system to control room is categorized as Severity

1. The severity matrix as per maintenance contract is given below: Order in Petition No. 68/MP/2020 Page 62 Category Definition Severity 1 Urgent Complete system failure, severe system instability, loss or failure of any major subsystem or system component such as to cause a significant adverse impact to system availability, performance, or operational capability Severity 2 Serious Degradation of services or critical functions such as to negatively impact system operation. Failure of any redundant system component such that the normal redundancy is lost. Non-availability of System Integrators Man-power at Control Centre during working hours, non-availability of spares Severity 3 Minor Any other system defect, failure, or unexpected operation Severity 4 General/Technical Help Request for information, technical configuration assistance, how to guidance and enhancement requests

j) If due to any fault/ malfunctioning, the real time grid operations get affected, down time is recorded for the period for which the fault/ malfunctioning persisted. For example, if both Main and Back up servers of SCADA system are down and grid operators are not getting any data through SCADA system, the incident is considered with highest severity and contribute to unavailability.

k) As Communication networks are provided by ULDC/ POWERTEL/ third party lease lines, RLDC does not have direct control over the availability of each links. As such data outage due to communication network is not considered under SCADA availability calculation.

l) The downtime for all such incidents reported in a month are accumulated to arrive at the total system downtime in that month based on the status of servers stored in SCADA database, month-wise percentage availability in terms of hours and percentage is calculated. The same is compiled for computation of monthly/ quarterly availability of SCADA system. Order in Petition No. 68/MP/2020 Page 63

55. The weightage for this parameter is 10. The Petitioner has submitted that percentage availability of 12 months (April 2018 to March, 2019) is 99.96. The marks claimed by the Petitioner is as follows:

56. We have considered the submissions of the Petitioner and verified its claims. Accordingly, as per Appendix VI of the RLDC Fees and Charges Regulations 2015, the weightage for availability of SCADA is considered as 9.996 out of 10. KPI-5: Voltage Deviation Index (VDI)

57. The Petitioner has submitted that the Voltage deviation index of important substations is calculated on daily, weekly as well as monthly basis and same is S. No. Month % Availability

1 April'18 99.970

2 May'18 100.00

3 June'18 100.00

4 July'18 99.960

5 August'18 100.00

6 September'18 100.00

7 October'18 99.950

8 November'18 100.00

9 December'18 100.00

10 January'19 100.00

11 February'19 100.00

12 March'19 99.670 Average of 12 months 99.963 Performance during FY 2018-19: 99.963 Marks Scored (In proportion of the %age performance above) 9.996 Order in Petition No. 68/MP/2020 Page 64 intimated to utilities via daily, weekly and monthly reports. VDI for each important station is calculated as the percentage of time the voltage was outside the range specified in the Grid Code (380-420 kV at 400 kV level, 728-800 kV at 765 kV level). For this purpose, data recorded by SCADA is used. The percentage of samples lying outside the Grid Code specified range constitutes VDI for the station. A sample calculation is shown below: Station %age of time Voltage below 728/380 %age of time Voltage between 728/380 kV & 800/420 %age of time Voltage above 800/420 Voltage deviation index (%age of time voltage is outside IEGC band) Maximum Voltage (kV) Minimum Voltage (kV) Average Voltage (kV) Agra 0.00% 100.00% 0.00% 0.00% 796 755 777

58. Further, the Petitioner submitted that Section 2.5.9 of the NLDC Operating Procedure 2018, gives the corrective actions to be taken in the event of voltage going high and low. The relevant extract from the procedure is reproduced below: Following corrective measures shall be taken in the event of voltage going high / low:- 2.5.9.1 In the event of high voltage (when the bus voltage going above 410 kV), following specific steps would be taken by the respective grid substation/generating station at their own, unless specifically mentioned by NLDC/RLDC/SLDCs. The bus reactor is switched in

ii. The manually switchable capacitor banks is taken out

iii. The switchable line/tertiary reactor are taken in.

iv. Optimize the filter banks at HVDC terminal

v. All the generating units on bar shall absorb reactive power within the capability curve

vi. Operate synchronous condensers wherever available for VAR absorption

vii. Operate hydro generator / gas turbine as synchronous condenser for VAR absorption wherever such facilities are available

viii. Bring down power flow on HVDC terminals so that loading on parallel EHV AC network goes up, resulting in drop in voltage. Order in Petition No. 68/MP/2020 Page 65

ix. Open lightly loaded lines in consultation with RLDC/SLDC for ensuring security of the balanced network. To the extent possible, it must be ensured that no loop of transmission lines is broken due to opening of lines to control the high voltage. Further, switching operations may be kept to minimum as far as possible in accordance with guidelines issued in this regard. 2.5.9.2 In the event of low voltage (when the bus voltage going down below 390kV), following specific steps would be taken by the respective grid substation/generating station at their own, unless specifically mentioned by NLDC/RLDC/SLDCs. Close the lines which were opened to control high voltage in consultation with RLDC/SLDC.

ii. The bus reactor is switched out

iii. The manually switchable capacitor banks are switched in.

iv. The switchable line/tertiary reactor are taken out

v. Optimize the filter banks at HVDC terminal

vi. All the generating units on bar shall generate reactive power within capability curve.

vii. Operate synchronous condenser for VAR generation

viii. Operate hydro generator / gas turbine as synchronous condenser for VAR generation wherever such facilities are available

ix. Increase power flow on HVDC terminals so that loading on parallel Extra High Voltage (EHV) network goes down resulting in rise in voltage.

59. The Petitioner submitted that corrective actions are taken in real time grid conditions by NLDC at 765kV & inter-regional level by opening/ closing shunt reactors, transmission lines etc. and by RLDCs for other inter-State system. The Petitioner also submitted that apart from these, persistent high voltage and low voltage are being reported in the NLDC Operational feedback every quarter. Link for NLDC operational feedback for the quarter Jul18 - Sept18 is available at https://posoco.in/download/nldc-operational-feedback_october_2018_q2-2/?wpdmdl=20373. Nodes experiencing low/high voltage are listed in Operational Feedback. This information is being discussed in Standing Committee on Power System Planning of different regions with the stakeholders. Corrective action is also being discussed in standing committee meetings and OCC meetings. Order in Petition No. 68/MP/2020 Page 66

60. NLDC also uploads the information on Voltage Deviation Index (VDI) on its website on daily, weekly and monthly basis as a part of its Daily, Weekly and Monthly reports. The relevant web links are as under: KPI-5 (VDI) Web Link on NLDC website Daily VDI https://posoco.in/reports/system-reliability-indices/daily- vdittcatc/daily-vdittcatc-2018-19/ Weekly VDI https://posoco.in/reports/system-reliability-indices/weekly- vdittcatc/weekly-vdittcatc-2018-19/ Monthly VDI https://posoco.in/reports/system-reliability-indices/monthly- vdittcatc/monthly-vdittcatc-2018-19/

61. The weightage for the parameter Voltage Deviation Index is 10. The Petitioner has submitted the details of VDI as under: S. No. Name of the 400/765 kV substation Intimation to utilities through Daily reports corrective action or not Intimation to utilities through weekly reports for corrective action or Intimation to utilities through monthly reports for corrective action or not A B C D E

1 Agra Y Y Y

2 Anpara-D Y Y Y

3 Anta Y Y Y

4 Ballia Y Y Y

5 Bhiwani Y Y Y

6 Fatehpur Y Y Y

7 Greater Noida Y Y Y

8 Lucknow Y Y Y

9 Lalitpur Y Y Y

10 Meerut Y Y Y

11 Moga Y Y Y

12 Phagi Y Y Y

13 Unnao Y Y Y Order in Petition No. 68/MP/2020 Page 67

14 Akola Y Y Y

15 Aurangabad Y Y Y

16 Bhopal (BDTCL) Y Y Y

17 Bilaspur Y Y Y

18 Bina Y Y Y

19 Champa Y Y Y

20 Dharamjaigarh Y Y Y

21 Dhule (BDTCL) Y Y Y

22 Gwalior Y Y Y

23 Indore Y Y Y

24 Koradi Y Y Y

25 Pune Y Y Y

26 Raigarh PS (Kotra) Y Y Y

27 Sasan Y Y Y

28 Seoni Y Y Y

29 Sipat Y Y Y

30 Sholapur Y Y Y

31 Tamnar PS Y Y Y

32 Tirora Y Y Y

33 Vadodara Y Y Y

34 Wardha Y Y Y

35 Nellore PS Y Y Y

36 Raichur Y Y Y

37 Kurnool Y Y Y

38 Thiruvalam Y Y Y

39 Srikakulam Y Y Y

40 Angul Y Y Y

41 Gaya Y Y Y

42 Jharsuguda Y Y Y

43 Ranchi Y Y Y

44 Bongaigaon Y Y Y

45 Bongaigaon TPS Y Y Y

46 Biswanath Chariali Y Y Y

47 Misa Y Y Y Order in Petition No. 68/MP/2020 Page 68

48 Silchar Y Y Y Performance during FY 2018-19 (In %)*: 100.00 Marks Scored (In proportion of the %age performance above) 10.00 *Formula for performance calculation: (((No. of daily reports issued (to be derived from column C)/365(Total no. of days in FY2018- 19))*100)+(No. of weekly reports issued (to be derived from column D)/52(Total no. of weeks in FY2018-19))*100)+ (No. of monthly reports issued (to be derived from column E)/12)*100))/3

62. We have considered the submission of the Petitioner and verified its claims. Accordingly, as per Appendix VI of the Fees and Charges Regulations 2015, the weightage for Voltage Deviation Index (VDI) is considered as 10 out of 10. KPI-6: Frequency Deviation Index (FDI)

63. The Petitioner has submitted that the FDI is calculated as the percentage of time for which frequency remains outside the band prescribed in the Grid Code. Ten second synchrophasor data is used for the calculation. The percentage of samples lying below 49.9 Hz and above 50.05 Hz together constitute FDI. The sample is shown below: Date Percentage of time frequency is Freq. Deviation Index (FDI) Average Frequency (Hz) <49.9 Hz 49.9 50.05 >50.05 Hz 01-May-18 1.98 78.74 19.28 21.26 50.00

64. The frequency deviation indices are being reported on daily basis along with weekly and monthly reports as per Regulation. The possible no. of reports which Order in Petition No. 68/MP/2020 Page 69 could be generated (365 for daily, 52 for weekly and 12 for monthly) has been converted to KPI scores based on the actual reporting.

65. NLDC uploads the information on Frequency Deviation Index (FDI) on its website on daily, weekly and monthly basis as a part of its Daily, Weekly and Monthly reports. The relevant web links are as under: Daily FDI https://posoco.in/reports/frequency-profile/frequency-profile-2018-19/ Weekly FDI https://posoco.in/reports/weekly-reports/weekly-reports-2018-19/ Monthly FDI https://posoco.in/reports/monthly-reports/monthly-reports-2018-19/

66. The weightage for the reporting of this parameter i.e. frequency deviation index (FDI) is 10. The Petitioner has submitted that it has issued daily, weekly and monthly Reports for the months of April 2018 to March 2019. Performance during FY 2018-19 (In %)*= 100.00 Marks Scored (In proportion of the %age performance above) 10.00 *Formula for performance calculation: (((No. of daily reports issued)/365(Total no. of days in FY 2018-19))*100) + (No. of weekly reports issued /52 (Total no. of weeks in FY 2018-19))*100) + (No. of monthly reports issued /12)*100))/3

67. We have considered the submission of the Petitioner and verified its claims. Accordingly, as per Appendix VI of the Fees and Charges Regulations 2015, the weightage for Frequency Deviation Index (FDI) is considered 10 out of 10. KPI-7: Reporting of System Reliability Order in Petition No. 68/MP/2020 Page 70

68. The deviation indices are being reported on daily basis for the critical nodes along with weekly and monthly reports as per the Regulations. The possible no. of reports which could be generated (365 for daily, 52 for weekly and 12 for monthly) has been converted to KPI scores based on the actual reporting.

69. The weightage for this parameter i.e. Reporting of System Reliability (RSR) is

10. The Petitioner has submitted that it has reported (a) (N-1) violations; (b) ATC violations; and (c) Angle difference between important buses through daily, weekly and monthly reports for the months of April 2018 to March 2019. The Petitioner has submitted the following reports of system reliability: (a) Reporting of (N-1) violations (To be reported to CERC): X*= 100 * Formula (((No. of daily reports issued /365(Total no. of days in FY2018-19))*100) + (No. of weekly reports issued /52(Total no. of weeks in FY2018-19))*100) + (No. of monthly reports issued /12)*100))/3 (b) Reporting of ATC violations (To be reported to CERC): Y*= 100 * Formula (((No. of daily reports issued /365(Total no. of days in FY2018-19))*100) + (No. of weekly reports issued /52(Total no. of weeks in FY2018-19))*100) + (No. of monthly reports issued /12)*100))/3 (c) Reporting of Angle difference between important buses (To be reported to CERC) Z*= 100 * Formula (((No. of daily reports issued /365(Total no. of days in FY2018-19))*100) + (No. of weekly reports issued /52(Total no. of weeks in FY2018-19))*100) + (No. of monthly reports issued /12)*100))/3 Order in Petition No. 68/MP/2020 Page 71 Performance during FY 2018-19 (In %)*= 100.00 Marks Scored (In proportion of the %age performance above) 10.00 * Formula (X+Y+Z)/3

70. With reference to the System Reliability, the percentage of times N-1 criteria (i.e. Total Transfer Capability) violated in the inter-regional corridors is being reported by NLDC on daily, weekly and monthly basis. The relevant web links are as under: Daily reporting https://posoco.in/reports/system-reliability-indices/daily- vdittcatc/daily-vdittcatc-2018-19/ Weekly reporting https://posoco.in/reports/system-reliability-indices/weekly- vdittcatc/weekly-vdittcatc-2018-19/ Monthly reporting https://posoco.in/reports/system-reliability-indices/monthly- vdittcatc/monthly-vdittcatc-2018-19/

71. With reference to the System Reliability, the percentage of times ATC (i.e. Available Transfer Capability) violated in the inter-regional corridors is being reported by NLDC on daily weekly and monthly basis. The relevant web links are as under: Daily reporting https://posoco.in/reports/system-reliability-indices/daily- vdittcatc/daily-vdittcatc-2018-19/ Weekly reporting https://posoco.in/reports/system-reliability-indices/weekly- vdittcatc/weekly-vdittcatc-2018-19/ Monthly reporting https://posoco.in/reports/system-reliability- indices/monthly-vdittcatc/monthly-vdittcatc-2018-19/

72. With reference to the System Reliability, the percentage of times the angular difference on important buses was beyond the permissible limits, is being reported by NLDC on daily, weekly and monthly basis. The relevant web links are as under: Order in Petition No. 68/MP/2020 Page 72 Daily reporting https://posoco.in/reports/system-reliability- indices/daily-angular-difference/daily-angular- difference-2018-19/ Weekly reporting https://posoco.in/reports/system-reliability- indices/weekly-angular-difference/weekly- angular-difference-2018-19/ Monthly reporting https://posoco.in/reports/system-reliability- indices/monthly-vdittcatc/monthly-vdittcatc-2018-

73. We have considered the submission of the Petitioners. As per Appendix VI of the Fees and Charges Regulations 2015, the weightage for reporting system reliability is allowed as 10 out of 10. KPI-8: Availability of website

74. The Petitioner has submitted that different type of network monitoring tools have been deployed at different control centres to capture the outages of websites, some of those are PRTG, Trend Micro Anti-APT Deep Discovery etc. This network management software generates comprehensive reports. Similarly, with the ISP service providers user interface, user can see the availability of the ISP links which is commercially linked also.

75. The Petitioner has submitted that depending upon the availability data, month- wise percentage availability has been calculated. Then, percentage average availability of 12 months, has been proportionately converted to marks scored.

76. The weightage for the parameter availability of website is 10. The Petitioner has submitted the details of percentage of availability of website for 12 months (April 2018 to March 2019) as 99.99%. The details of marks claimed are as follows: Order in Petition No. 68/MP/2020 Page 73

77. We have considered the submission of the Petitioner. The Petitioner has reported availability of website as 99.99%. The weightage allowed for availability of website is allowed as 9.999 out of 10. KPI-9: Availability of Standby Power Supply

78. The Petitioner has submitted that powers to all the critical infrastructures are supplied through redundant UPS system and battery system. Inputs to these UPS/ battery system are being supplied either through incoming feeders or DG sets (in case of failure of main inputs). These auxiliary systems are also under AMC and are Sl. No Month % Availability

1 April'18 100.00

2 May'18 100.00

3 June'18 99.89

4 July'18 99.99

5 August'18 100.00

6 September'18 100.00

7 October'18 99.99

8 November'18 100.00

9 December'18 100.00

10 January'19 100.00

11 February'19 100.00

12 March'19 100.00 Average of 12 months 99.99 Performance during FY 2018-19*: 99.99 Marks Scored (In proportion of the %age performance above) 9.999 * Average of 12 months Order in Petition No. 68/MP/2020 Page 74 being checked/ tested on regular basis. Trial runs are carried on weekly basis to check the DG set availability. Daily records are being maintained at each of the locations. The corresponding data is used to calculate the availability of standby power supply. Depending upon the availability data, month-wise percentage availability has been calculated. Then, percentage average availability of 12 months, has been proportionately converted to marks scored.

79. The Petitioner has submitted the details of percentage of availability of standby power supply for 12 months (April 2018 to March 2019) as 100%. The total weightage for the parameter availability of standby power supply is 5. The Petitioner has submitted availability of standby power supply as under: Performance during FY 2018-19*: Marks Scored (in proportion of the %age performance above) * Average of 12 months

80. We have considered the submission of the Petitioner. Since the Petitioner has submitted the 100% availability of the standby power supply for all the 12 months, we consider this KPI as 100%. Therefore, the weightage allowed for availability of standby power supply is considered as 5 out of 5. KPI 10: Variance of Capital expenditure

81. The Petitioner has submitted that for calculating the performance against KPI- 10, the figures as per the earlier orders issued by the Commission for fees and Order in Petition No. 68/MP/2020 Page 75 charges for the control period 2014-19 have been considered as targets and the figures as per the Auditor Certificate have been taken as actual performance.

82. The weightage for the parameter Variance of capital expenditure is 5. The Petitioner has submitted the details of Variance of Capital Expenditure as under: Figures in Rs. Lakh Capital Expenditure allowed by CERC (A) Actual Expenditure incurred (B) % Variation C=ABS((A-B)/A)*100 2020.00 381.66 81.11 In column A, figures as per the RLDCs Fees and Charges orders by CERC for the control period 2014-19 have been considered. In Column B, value as per Auditor Certificate for FY 2018-19 has been considered.

83. The Petitioner has claimed that up to 10% variation has been considered for claiming 100% performance and for any additional 3% variation beyond initial 10%, performance decreases by 1% in line with the methodology of the Incentive calculation prescribed in the Regulation 29(5) of the Fees and Charges Regulations 2015. Percentage performance has been proportionately converted to marks scored. The calculations regarding the KPI-10 is as mentioned below: Performance during FY 2018-19*: 76.30 * Formula IF(C>10, 100-(C-10)/3,100) Marks Scored (in proportion of the %age performance above) 3.815 * Average of 12 months

84. We have considered the submission of the Petitioner. The weightage allowed for variance of capital expenditure is considered as 3.815 out of 5. KPI 11: Variance of Non-Capital expenditure Order in Petition No. 68/MP/2020 Page 76

85. The Petitioner has submitted that for calculating the performance against KPI- 11, figures as per earlier orders of the Commission for fees and charges for the control period 2014-19 and order in Petition no. 344/MP/2018 along with IA 26/2019, dated 10.06.19 have been considered as targets and the figures as per the Auditor Certificate respectively have been taken as actual performance.

86. The weightage for the parameter variance of non-capital expenditure is 5. The Petitioner has submitted the details of variance of non-capital expenditure as under: Figures in Rs. Lakh Non-Capital Expenditure allowed by CERC (A) Actual Expenditure incurred (B) % Variation C=ABS(((A-B)/A)*100) 5003.47 5570.05 11.32 In the Non-Capital Expenditure, HR Expenses, O&M Expenses have been considered. In column A, figures as per the RLDCs Fees and Charges Orders by CERC for the control period 2014-19 and CERC order of Petition no. 344/MP/2018 Along with IA 26/2019, Dtd. 10.06.19 have been considered. In Column B, value as per Auditor Certificate for FY 2018-19 has been considered.

87. Further the Petitioner submitted that 10% variation has been considered for claiming 100% performance and for any additional 3% variation beyond initial 10%, performance decreases by 1% in line with the methodology of the Incentive calculation prescribed in the Regulation 29(5) of the Fees and Charges Regulations 2015. Percentage performance has been proportionately converted to marks scored. The calculations regarding the KPI-11 is mentioned below: Performance during FY 2018-19*: 99.56 * Formula IF(C>10, 100-(C-10)/3,100) Order in Petition No. 68/MP/2020 Page 77 Marks Scored (in proportion of the %age performance above) 4.978 * Average of 12 months

88. We have considered the submission of the Petitioner. The weightage allowed for variance of non-capital expenditure is considered as 4.978 out of 5. KPI 12: Percentage of certified employees

89. The Petitioner has submitted that the certification framework was introduced in 2011 based on recommendations of G.B. Pradhan Committee Report which called for Introduction of a system of certification of System Operators by an independent body such as the NPC/NPTI and Establishment of an Institute for training of system operators. National Power Training Institute (NPTI) may be entrusted with the responsibility of training initially. Accordingly, a framework was developed for System Operators from the States and POSOCO for Training and Certification, with NPTI appointed as the certifying agency.

90. Further the Petitioner submitted that the framework provides for Basic Level, Specialist Level and Management Level Courses. Till date 7 (seven) Basic Level certification and 6 (six) specialist level certifications have been conducted (three on regulatory framework in Power Sector, two on power system reliability and one on power system logistics). The examinations are held online on all India basis. Basic Level Certification is a foundation level exam where all system operators in the country can appear, whereas, specialist level exams focus on a particular area of Order in Petition No. 68/MP/2020 Page 78 expertise. Validity of both certificates is three years, system operators are required to have at least one certificate still in its validity period to be qualified as certified.

91. The weightage for the parameter percentage of certified employees is 5. The Petitioner has submitted the details of percentage of certified employees as follows: No. of eligible employees for certification as on 31.3.2019 (A) No. of Employees Certified as on 31.3.2019 (B) %age of Employees Certified as on 31.3.2019 (C=B/A*100) 65.00 23.00 35.38

92. The Petitioner has claimed that while evaluating the KPI-12 performance, performance is proposed to be considered 100% for certification level of 85% and for certification below 85%, performance decreases by 1% for every 3% decrease in the certification in line with the methodology of the Incentive calculation prescribed in the Regulation 29(5) of the Fees and Charges Regulations 2015. Percentage performance has been proportionately converted to marks scored which is as follows: Performance during FY 2018-19*: 83.462 * Formula IF(C<85, (100-(85-C)/3),100)# Marks Scored (in proportion of the %age performance above) 4.173 * Average of 12 months # Upto 85% certification, performance is proposed to be considered 100% and for certification below 85%, performance shall decrease by 1% for every 3 % decrease in the certification in line with the methodology of the Incentive calculation prescribed in the Regulation 29(5) of the RLDC Fees and Charges Regulations 2015 Order in Petition No. 68/MP/2020 Page 79

93. We have considered the submission of the Petitioner. The weightage for percentage of certified employees is considered as 4.173 out of 5. Overall Achievement of KPIs:

94. We have considered the submissions of the Petitioner with regard to KPI taking into account above. The following KPIs are allowed as per the methodology specified in Appendix-V of the Fees and Charges Regulations 2015: Key Performance Indicators Weightage Petitioner claimed for FY 2018-19 Allowed

1 Reporting of Interconnection meter error 10 10.00 10.00

2 Reporting of Grid Incidents and Grid Disturbance

10 10.00 10.00

3 Average processing time of shut down request

10 10.00 10.00

4 Availability of SCADA System 10 9.996 9.996

5 Voltage Deviation Index (VDI) 10 10.00 10.00

6 Frequency Deviation Index (FDI) 10 10.00 10.00

7 Reporting of System Reliability 10 10.00 10.00

8 Availability of Website 10 9.999 9.999

9 Availability of Standby Supply 5 5.00 5.00

10 Variance of Capital expenditure 5 3.815 3.815

11 Variance of Non Capital expenditure 5 4.978 4.978

12 Percentage of Certified Employee 5 4.173 4.173 Total 100 97.961 97.961 Perusal of the above table reveals that the Petitioner has achieved 97.961% in Key Performance Indicators out of possible achievement of 100%.

95. The Commission, under sub-clause (1) of Regulation 21 of the Fees and Charges Regulations 2015 has allowed Performance Related Pay to be met from the Order in Petition No. 68/MP/2020 Page 80 incentive allowed in accordance with sub-clause (5) of Regulation 29 of the Fees and Charges Regulations 2015 that provides as follows: (5) The RLDCs or NLDC, as the case may be, shall be allowed to recover incentive of 7% of annual charges for aggregate performance level of 85% for three years commencing from 1.4.2014 and for aggregate performance level of 90% from 1.4.2017. The incentive shall increase by 1% of annual charges for every 5% increase of performance level above 90%: Provided that incentive shall be reduced by 1% of annual charges on pro rata basis for the every 3% decrease in performance level below 85%.

96. The Commission, in its Order dated 10.06.2019 in Petition No. 344/MP/2018, has held as under:

62. .in exercise of provisions of Power to Relax under Regulation 35 of Fees and Charges Regulations, 2015 we hereby relax Regulation 29(5) of Fees and Charges Regulations, 2015 and direct that RLDCs or NLDC, as the case may be, shall be allowed to recover incentive of 15% of annual charges post implementation of pay revision w.e.f 1.1.2017 subject to ceiling as per DPE Guidelines in place of 7%, keeping other provisions of Regulation 29(5) same. In case of shortfall as per DPE Guideline, the balance amount shall be paid from the LDCD fund.

97. In view of Regulation 29(5) of the Fees and Charges Regulations 2015 read with Order dated 10.06.2019 in Petition No. 344/MP/2018 and aggregate KPI level of 97.961% for 2018-19, the Commission hereby allows the Petitioner to recover 16.592% of annual charges for the financial year 2018-19 to meet the Performance Related Pay for the financial year 2018-19 as detailed below: Aggregate Performance Level % of Annual charges 90% 15% 90%-95% +1% 95% - 97.961%% +0. 592 % Total 97.961%% Total 16. 592% Order in Petition No. 68/MP/2020 Page 81

98. As provided in Regulation 21(1) of Fees and Charges Regulations 2015, the Commission directs that the Performance Related Pay be computed in accordance with DPE guidelines and shall be met from the incentive allowed above.

99. The Commission observes that Regulations 29(6) of the Fees and Charges Regulations 2015 provides as below: The RLDCs or NLDC, as the case may be, shall compute the Key Performance Indicators on annual basis for the previous year ending on 31st March and submit to the Commission along with petitions for approval of the Commission as per Appendix V and Appendix VI of these Regulations: Provided that the key performance indicators of previous year ending on 31st March shall be considered to recover incentive on each year and shall be trued up at the end of the control period.

100. Accordingly, the Petitioner is directed to file true up petition for control period 2014-19 within three months of issue of this order, taking into account the amount recovered from users and actual pay-out to the employees.

101. We further observe that the Board approvals submitted by the Petitioner cover only the executives and supervisors for payment of PRP. However, as per the details submitted by Petitioner, it is observed that the Petitioner has disbursed PRP to workmen also. The Petitioner is, therefore, directed to submit appropriate Board approval for same with the true up petition.

102. The Petition No. 68/MP/2020 is disposed of in terms of the above. sd/- sd/- sd/- (Arun Goyal) (I. S. Jha) (P.K. Pujari) Member Member Chairperson