Petition of the CERC (Conduct of Business) and (Terms and Conditions of Tariff) Regulations for Existing Transmission and Distribution System – EQ

Summary:

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## 📌 Case Overview

* **Petitioner:** Damodar Valley Corporation (DVC)
* **Respondents:** WBSEDCL (West Bengal State Electricity Distribution Co. Ltd.), JBVNL (Jharkhand Bijlee Vitran Nigam Ltd.)
* **Subject:** Petition under Sections 62 & 79 of the Electricity Act, 2003, seeking **truing up of transmission tariff for FY 2019-20 to FY 2023-24** for DVC’s **Transmission & Distribution (T\&D) system excluding 400 kV lines**.
* **Date of Hearing:** 22 July 2025
* **Coram:** Chairperson Jishnu Barua, Members Ramesh Babu V., Harish Dudani, Ravinder Singh Dhillon.

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## ⚡ Background

* DVC earlier filed Petition No. 482/TT/2020, where CERC had provisionally allowed **Additional Capital Expenditure (ACE) of ₹11,851.94 lakh** for 2019-24 tariff period.
* In this new petition, DVC has claimed **ACE of ₹49,712.09 lakh**, which is a **fourfold increase** compared to earlier approval.
* Commission questioned this sharp escalation in ACE.

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## 🏛️ Commission’s Directions

The Commission directed DVC to file detailed submissions (within six weeks) on affidavit, covering:

### A. Fresh ACE claims (2019-24)

1. **Non-claimed items from 2014-19 & 2019-24 filings** – reasons for omission earlier; LoA details, delays in completion, soft costs.
2. **₹898.16 lakh R\&A works under non-PSDF grant** – provide details & modifications.
3. Clarification on why **new commissioned assets** (augmentation at substations/switchyards) are claimed under ACE instead of a separate tariff petition, as earlier ordered in Petition 386/TT/2014.
4. Justification for claiming **procurement of laptops/computers** under ACE instead of O\&M.
5. Approval status of **islanding scheme at Chandrapura TPS** and why claimed under T\&D instead of generating system.
6. Details of powerhouses/switchyards where R\&A works done.
7. Cost details for **communication equipment replacements** (sanctioned in 2007–2013).
8. **CEA consent (24.2.2023)** for transfer of switchyard infra of decommissioned CTPS, BTPS, DTPS – but ACE of ₹15,060.44 lakh claimed in FY 2019-21. Justify claiming cost before approval, and provide Gross Block, Net Block, depreciation data.

### B. Actual ACE of approved items

* Soft cost details & completion timelines.
* DPR & completion of PSDF R\&A works.
* Schemes for **energy metering** under CEA Regulations, 2006 (costs of replacing with 0.2S class meters).
* Justification for claiming **Remote Metering ACE** (sanctioned 2013, claimed only in FY 2020-21).
* Clarify why **testing equipment procurement** is claimed as ACE and not O\&M.

### C. De-capitalisation

* Provide details of de-capitalised assets replaced under R\&A.

### D. O\&M Expenses (2019-24)

* Elements of 220 kV & 132 kV bays.
* Justification for claiming O\&M for various voltage cables as per norms for S/C transmission lines.

### E. Financials & Audit

* Submit **Form 10-B** (de-capitalisation statement).
* Auditor’s Certificate for capital cost and ACE.
* Actual O\&M expenses certified by auditor.
* Income tax returns/supporting docs (claimed effective tax rate: 25.17%).

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## ✅ Next Steps

* Respondents to file replies within **4 weeks**.
* Petitioner to file rejoinder within **2 weeks** thereafter.
* Next hearing scheduled for **16 September 2025**.

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## 👉 Takeaway

CERC has raised serious queries over DVC’s **sharp increase in ACE (₹11,851 lakh → ₹49,712 lakh)** for its T\&D system. DVC must justify delayed claims, treatment of new assets under ACE, and unusual inclusions (IT equipment, metering, islanding costs). Commission has kept the matter open, pending detailed affidavit and respondent replies.

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