In the matter of the CERC (Conduct of Business) and (Terms and Conditions of Tariff) for Truing up and determination of the transmission tariff at the Vapi Sub-station in the Western Region – EQ

Summary:

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**1. Case Details:**
– **Petition No.:** 516/TT/2025
– **Petitioner:** Power Grid Corporation of India Limited (PGCIL)
– **Respondents:** Multiple State Power Distribution Companies and Utilities (MPPMCL, MSEDCL, GUVNL, etc.)
– **Forum:** Central Electricity Regulatory Commission (CERC), New Delhi
– **Coram:** Members Ramesh Babu V. and Harish Dudani
– **Date of Order:** 07.01.2026

**2. Subject of Petition:**
– **Approval sought under:** Section 62 read with Section 79(1)(d) of the Electricity Act, 2003, and relevant CERC Regulations.
– **Purpose:**
– Truing up of transmission tariff for the **2019–24 tariff period** under CERC Tariff Regulations, 2019.
– Determination of transmission tariff for the **2024–29 tariff period** under CERC Tariff Regulations, 2024.
– **Asset in question:** 400 kV D/C Kakrapar APP–Navsari and Kakrapar APP–Vapi transmission lines along with associated bays in the Western Region.

**3. Background:**
– The transmission asset was commissioned on 29.06.2017 with an initial investment approval of ₹3,787.1 crore.
– Earlier tariff approvals were granted via previous CERC orders (Petition No. 15/TT/2020 dated 15.02.2021).
– PGCIL filed this petition for truing up of 2019–24 costs and determining tariffs for 2024–29.

**4. Key Prayers by PGCIL:**
– Approval of trued-up capital cost and additional capital expenditure (ACE).
– Recovery/refund of Annual Fixed Charges (AFC) shortfall/excess.
– Reimbursement of petition filing fees, publication expenses, RLDC fees, licensee fees, and GST (if applicable in future).
– Permission to file separate petitions for security expenses, insurance, and capital spares.

**5. Commission’s Analysis & Decisions:**

**A. Truing Up for 2019–24 Tariff Period:**
– **Capital Cost:** Opening capital cost as on 01.04.2019 approved at ₹314.8324 crore after adjusting for excess initial spares.
– **Additional Capitalisation (ACE):** ACE of ₹57.85 lakh (2019–20) and ₹6.51 lakh (2020–21) allowed; ₹79.41 lakh deduction in 2022–23 due to unexecuted work.
– **Debt-Equity Ratio:** Maintained at 70:30 as per Regulations.
– **Depreciation:** Approved based on Weighted Average Rate of Depreciation (WAROD).
– **Interest on Loan (IoL):** Allowed based on actual weighted average interest rates.
– **Return on Equity (RoE):** Grossed up rate of 18.782% applied considering MAT rate of 17.472%.
– **O&M Expenses:** Allowed as per normative rates specified in Regulations.
– **Interest on Working Capital (IWC):** Approved based on normative components and applicable interest rates.
– **Approved AFC for 2019–24:** Ranged from ₹53.4369 crore (2019–20) to ₹48.3980 crore (2023–24).

**B. Determination of Tariff for 2024–29 Tariff Period:**
– **Capital Cost:** Opening cost as on 01.04.2024 set at ₹314.7569 crore; ACE of ₹28.05 lakh allowed.
– **Debt-Equity Ratio:** Continued at 70:30.
– **Depreciation:** Calculated based on remaining useful life.
– **Interest on Loan:** Allowed with provision for truing up due to floating interest rates.
– **Return on Equity:** Continued at grossed-up rate of 18.782%.
– **O&M Expenses:** Allowed as per 2024 Regulations.
– **Interest on Working Capital:** Approved at 11.90% based on SBI MCLR.
– **Approved AFC for 2024–29:** Ranges from ₹46.6069 crore (2024–25) to ₹41.4064 crore (2028–29).

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