Sayan Tarafder P&R Case Study

Case Study
1. What is the difference between Connected Load, Contracted Demand & Maximum Demand?
Support with example.
Answer:
Connected Load
Connected Load, expressed in kW or kVA, is the aggregate of the manufacturer's rated capacities or,
in its absence, aggregated capacities of all energy consuming devices or apparatus connected with
the Distribution licensee's service line on the consumer's premises that can be used concurrently
and shall be determined in accordance with the procedure outlined in the Regulations by the
Government.
Contracted Demand
Contracted Demand refers the maximum demand in kW or kVA agreed to be provided by the
distribution licensee and specified in the Power Purchase Agreement established between the
licensee and the customer is referred to as the Contractual load or Contracted Demand, and it
includes any subsequent revisions. The Contracted Demand is generally less than the Connected
Load.
Maximum Demand
Maximum Demand or Peak demand on an electrical system is simply the greatest level of electrical
power consumption for a certain time period. It is measured in kW or kVA. Peak demand is generally
classified as yearly, daily, or seasonal, and has a power unit. It is also defined as a period in which
electrical power is projected to be supplied at a considerably greater than normal supply level for an
extended length of time. Peak demand changes can happen on a daily, monthly, seasonal, or annual
basis. The actual point of peak demand for an electric utility business is a single half-hour or hourly
time that reflects the highest point of customer use of energy.
Example
Let us take a Regional Load having 10 bulbs of 50 Watts, 5 fans of 80 Watts and 2 motors of 750
watts
Therefore the total Connected Load = (10*50)+(5*80)+(2*750)
= 2400 watts (or) 2.4kWatt
But all the loads are not switched on at all the time. For example the lights are not switched ON
during the day and the pumps are not switched ON during the night
Hence, let say the Maximum Demand or the Peak Load is 1500 watts or 1.5kWatt in the entire day.
Then the Contracted Demand will be less than or equal to 1.5kwatt
2. What are the different stages of filing of ARR & Tariff petition of a Distribution company?
Answer:
In line with Section 61 of the Electricity Act, the State Commissions define the regulatory framework
for rate setting. The regulatory framework also serves as the guiding principles for drafting and filing
a tariff petition with the commission. The State Commission examines the petition's ideas from the
perspective of rules, conformity with previous rulings and directives, preserving consumer interests,
and determining tariff so that the cost of energy is recovered appropriately.
The First stage in tariff determination is for Discoms to file a tariff petition or an Average Revenue
Recovery (ARR) petition. This petition estimates the entire revenue requirements, including power
purchase costs, O&M expenses, capital investments, and so on, as well as the recommended tariff
necessary to satisfy this revenue demand. The petition also includes an in-depth analysis of Discoms'
financial, operational, and technological situations.
The two petitions submitted as part of the tariff determination procedure are:
 Average Revenue Realized (ARR) Petition – This petition contains the estimated
Expenditure and Revenue Collection in the upcoming year.
 True Up Petition – This petition contains the audited reports in order to depict the actual
scenario of income and expenditure of the Discom and the technical details.
The petitions are available in the public domain on the commission's website, Discoms' websites,
and major publications, as well as in all Discom subdivisions. Consumers' comments and ideas on
these petitions are solicited through advertising and announcements. Before completing the tariff
order, public hearings are held with customer involvement. When formulating the tariff order, the
points highlighted by customers and replies received are taken into account.
Steps in the process of filling ARR and Tariff petition of a Distribution Company are –
 Filing of Petition by the DISCOM

 Primary Scrutiny and approval (Sent to DISCOM if revision required due to deficiencies)
 Submission to commission for admission
 Admission of petition by Commission
 Making of staff paper (uploading it in Commission website and public portal for response)
 Public hearing by Commission
 Consideration of petition from public hearing
 Preparation of Tariff order
 Issue of Tariff order
Tariffs are determined by a variety of variables, which can be classified as controlled or
uncontrollable. Controllable factors are those over which Discoms have control. For example – The
T&D losses and other performance parameters. But uncontrolled factors, are those over which
Discoms have no influence and cannot be identified.
3. Calculate normative interest on loan and Return on equity in accordance with MERC MYT
Regulations 2019 as per information provided below:
Scenario I
Capital cost – Rs.1000 Crore
Equity infused – Rs. 700 Crore
Loan Amount – Rs. 300 Crore
Scenario II
Loan – Rs. 800 Crore
Scenario III
Loan – Rs. 700 Crore
Answer:
Scenario I
Return on Equity = 15.50%
Debt to Asset Ratio = 0.3
Cost of Debt = 11.15% (According to IIFCL project rating)
Cap on Equity = 30%
Nominal Interest on loan = ₹ (700-(0.3*1000))*0.1115 Crores

= ₹ 46.5 Crores
Return on Equity = ₹ 300*0.155

= ₹ 46.5 Crores
Scenario II
Cap on Equity = 30%
Nominal Interest on loan = ₹ (|200-(0.3*1000)|)*0.1115 Crores

= ₹ 0 Crores
= ₹ 31 Crores
Scenario III
Cap on Equity = 30%
Nominal Interest on loan = ₹ (300-(0.3*1000))*0.1115 Crores

= ₹ 0 Crores

= ₹ 46.5 Crores
Submitted by – Sayan Tarafder

Email ID – m20sayant@nsb.ac.in
Contact Number - 8777408029

Sayan Tarafder P&R Case Study

Uploaded by

Copyright:

Available Formats

Sayan Tarafder P&R Case Study

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sayan Tarafder P&R Case Study

Uploaded by

Copyright:

Available Formats

Case Study

 Filing of Petition by the DISCOM

Nominal Interest on loan = ₹ (700-(0.31000))0.1115 Crores

Return on Equity = ₹ 300*0.155

Nominal Interest on loan = ₹ (|200-(0.31000)|)0.1115 Crores

Nominal Interest on loan = ₹ (300-(0.31000))0.1115 Crores

Return on Equity = ₹ 300*0.155

Submitted by – Sayan Tarafder

You might also like