Petition for Truing up and determination of the transmission tariff for Combined Asset under “Northern Region System Strengthening Scheme-XV” – EQ
Summary:
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### **1. PROCEEDINGS & COMMISSION’S DIRECTIONS**
After hearing PGCIL’s representatives, the Commission issued the following procedural directions:
**A. Timeline for Submissions:**
1. **Respondents** (State Utilities) to file their **replies within two weeks**, with an advance copy to PGCIL.
2. **PGCIL** may file its **rejoinder within two weeks** thereafter.
**B. Specific Information Sought from PGCIL (on Affidavit within two weeks):**
The Commission directed PGCIL to provide detailed, asset-specific information for most petitions. The **common themes** across the data requests are:
1. **Detailed Cost Breakdowns:**
* **Item-wise unit cost** for claimed Additional Capital Expenditure (ACE) related to asset replacement.
* **Element-wise/Party-wise break-up** of capital costs (as on 31.3.2019) and claimed ACE.
2. **Historical Comparison & Justification:**
* **Comparison tables** showing ACE **allowed in previous tariff orders vs. claimed now** for 2019-24, with justifications for any variations.
* **Reconciliation of cost overruns** (e.g., Petition 525/TT/2025 notes a variation of ₹1117.53 lakh).
3. **Regulatory Form Compliance:**
* Submission of specific **Forms (e.g., Form-5, 7B, 9C, 9E, 13)** related to plant & machinery cost, depreciation, and tariff calculations for both 2019-24 and 2024-29 periods.
4. **Technical & Economic Justification for Future Capex (2024-29):**
* **Basis, technical justification, and cost-benefit analysis** for ACE/De-capitalization claimed under **Regulation 25(2) of the 2024 Tariff Regulations**.
5. **Supporting Documentation:**
* **Certificates of obsolescence** from OEMs or competent authorities for replaced equipment.
* **Minutes of relevant committee meetings** approving projects (e.g., NERPC/TCC for Kumarghat substation in Petition 539/TT/2025).
* **Liquidated damages recovery statements** and **initial spares discharge statements**.
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### **2. KEY BUSINESS & REGULATORY IMPLICATIONS**
* **Regulatory Scrutiny:** The Commission is conducting a **detailed, granular review** of PGCIL’s capital expenditures, both past (truing up) and future (tariff determination). The focus is on **prudence, justification, and cost-effectiveness**.
* **Focus on ACE:** A significant portion of the inquiry revolves around **Additional Capital Expenditure (ACE)**, indicating scrutiny of project cost overruns, replacements, and upgrades.
* **Transparency & Accountability:** The directives emphasize **transparency** through standardized formats (tables, forms), comparisons with past approvals, and demand for third-party certificates (OEM).
* **Procedure:** The process follows a standard regulatory timeline: **Petition → Hearing → Directions for Information → Respondent’s Reply → Rejoinder → Final Order**.
* **Subject Matter:** The petitions cover a wide range of transmission assets—from system strengthening schemes to project-specific systems—highlighting PGCIL’s ongoing role in national grid development and the subsequent periodic tariff resets.
* **Next Steps:** The matters are **reserved for order** after compliance with the above directions. The final tariff orders will determine the revenue PGCIL can recover from beneficiary states for using these transmission assets for the next five years.
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