National Electric Power Regulatory Authority

Islamic Republic of Pakistan

NEPRA Tower, Ataturk Avenue(East), G-511, Islamabad
Ph: +92-51-9206500, Fax: +92-51-2600026
Web: www.nepra.org.pk, E-mail: [email protected]

Registrar

No. NEPRA/TRF-287/NTDC-2014/6291-6293
April 23, 2015

Subject:

Determination of the Authority in the matter of Petition filed by National

Transmission & Despatch Company Ltd. (NTDC) for Determination of Its
Transfer/Wheeling Charges for the FY 2014-15 - Case No. NEPRA/TRF287/NTDC-2014

Dear Sir,
Please find enclosed herewith the subject Determination of the Authority along
with Annex-1, II & III (46 pages) in Case No. NEPRA/TRF-287NTDC-2014.
2.
The determination is being intimated to the Federal Government for the purpose of
notification in the official gazette pursuant to Section 31(4) of the Regulation of
Generation, Transmission and Distribution of Electric Power Act (XL of 1997) and Rule
16(11) of the National Electric Power Regulatory Authority Tariff (Standards and
Procedure) Rules, 1998.
Enclosure: As above
14-k.4

( Syed Safeer Hussain )

Secretary
Ministry of Water & Power
`A' Block, Pak Secretariat
Islamabad
CC:
1. Secretary, Cabinet Division, Cabinet Secretariat, Islamabad.
2. Secretary, Ministry of Finance, 'Q' Block, Pak Secretariat, Islamabad.

Determination of the Authority in the matter of NTDC

No. IVEPRA/TRF-277/NTDC-2014

National Electric Power Regulatory Authority

(NEPRA)

PELITION NO. NEPRA/TRF-277/NTDC-2014

DETERMINAITON OF TRANSFER/WHEELING CHARGES
FOR THE YEAR 2014-15
UNDER
NEPRA TARIFF STANDARDS & PROCEDURE RULES - 1998
FOR
NATIONAL TRANSMISSION & DESPATCH COMPANY (NTDC)
Islamabad

A P Y; I a3

,2015

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/N7'DC-2014

DETERMINATION OF THE AUTHORITY IN THE MATTER OF PETITION FILED BY

NATIONAL TRANSMISSION & DESPATCH COMPANY (NTDC) FOR DETERMINATION
OF TRANSFER / WHEELING CHARGES FOR THE FY 2014-15.
CASE NO. NEPRA/TRF/277/NTDC-2014
PETITIONER
National Transmission & Dispatch Company Limited (NTDC)
540 WAPDA House, Lahore.
INTERVENER
1. Anwar Kamal Law Associates,
1-Turner Road, Lahore.
COMMENTATOR
1. Multan Chamber of Commerce & Industry,
Shahra-e-Aiwan-e-Tijarat 0 Sanat,
Multan.
REPRESENTATION
Managing Director
General Manager GSO
General Manager Planning (P)
General Manager (SO), NPCC
Finance Director

Determination of the Authority in the matter of NTDC

No. IVEPRA/I'RF-277/NTDC-2014

ABBREVIATIONS

CPPA
FY
GOP
MoWP
NTDC
GWh
KV
Kw
kWh
MW
NEPRA
O&M
PEPCO
SRO
T&T

Central Power Purchasing Agency

Financial Year
Government of Pakistan
Ministry of Water and Power
National Transmission & Despatch Company Limited
Giga Watt Hours
Kilo Volt
Kilo Watt
Kilo Watt Hour
Mega Watt
National Electric Power Regulatory Authority
Operation and Maintenance
Pakistan Electric Power Company
Statutory Regulatory Order
Transmission and Transformation Losses

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/N7'DC-2014

The Authority, in exercise of the powers conferred on it under Section 7(3) (a) read with Section
31 of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997,
Tariff (Standards and Procedure) Rules, 1998 and all other powers enabling it in this behalf, and
after taking into consideration all the submissions made by the parties, issues raised,
evidence/record produced during hearings, and all other relevant material, hereby issues this
determination.

(Khawaja Muh mad Naeem)

Member

(Himack
Member

Maj. Rtd. Haroon Rashid

Vice Chairman

Brig. (R) Tariq Saddozai

Chairman

Determination of the Authority in the matter of NTDC

No. NEPRA/TRF-277/N7'DC-2014

1.

Background of the NTDC

1.1

National Transmission & Dispatch Company (NTDC), hereinafter referred as (the

petitioner) is one of the successor companies of WAPDA, which was incorporated on
November 06, 1998 and commenced commercial operation on March 1, 1999. The
company has a status of public (unquoted) limited liability company under the Companies
Ordinance 1984. NTDC was granted Transmission License No. TL/01/2002 on 31st
December, 2002 to engage in the exclusive transmission business for a term of thirty (30)
years, pursuant to Section 17 of the Regulation of Generation, Transmission and
Distribution of Electric Power Act, 1997. Under the regime set out in the License, the
Company is entrusted to act as System Operator (SO), Transmission Network Operator
(TNO), Central Power Purchasing Agency (CPPA) and Contract Registrar and Power
Exchange Administrator (CRPEA). Presently, the Petitioner operates and maintains the
following Network System;
NTDC Network
Number of Grid Stations
Transmission Link (kms)
Transformers Capacity(MVA)

500 kV
13
5,183
17,400

220 kV
35
9,104
21,030

Total
48
14,287
38,430

NTDC Past Determination History

2.1

NTDC filed first petition for determination of transfer / wheeling charges on 28.4.2003
and its determination was given 13.4.2004. NTDC filed 2nd petition for transfer /
wheeling charges on 24.5.2005 and its determination was issued on 6.1.2006. In year 2006
NTDC's transfer price mechanism was revised to include K-ELECTRIC as a Distribution
Company in addition to eight Ex-WAPDA Distribution Companies while maintaining the
wheeling Use of System Charges for NTDC. NTDC filed 3rd petition on 23.8.2010 and its
determination was made on 9.5.2011. NTDC submitted motion for leave for review with
respect to the determination of the Authority which was decided on 18.7.2011. The
comparison of actual and determined tariff is given hereunder:
Rs./kW/Month
Fixed Charge (UOSCF)

FY 2003-04
73.40

FY 2006-07
100.15

FY 2010-11
85.91

FY 2012-13
102.43

NTDC Current Petition

3.1

National Transmission and Dispatch Company Limited (NTDCL), hereinafter called "the
Petitioner", being a Transmission Licensee of NEPRA filed a petition for the
determination of transfer/wheeling charges pertaining to the FY 2014-15 in terms of Rule
3(1) of Tariff Standards & Procedure Rules-1998 ("Rules") vide letter no.
MD/NTDCL/FD/1681-85 dated 17th September, 2014. According to NTDC following are
the main reasons / grounds to make afresh tariff application for the year 2014-15:
Increase in General Establishment Expendit ire due to an Adhoc and other reliefs
announced by GoP in the annual Budget.
5

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/NTDC-2014

The induction of new employees against vacant posts due to retirement and induction
against system expansion in the Transmission Network of NTDC.
Increase in Maintenance Expenditure:
o To ensure the desired reliability, security and adequacy of the transmission
network,
o To maintain and strengthen the transmission system to the optimum level,
o For augmentation/ Expansion in the Transmission Network of NTDC,
Financial burden of T & T losses due to determination of benchmark of 2.5% - 3.0%
approved by the NEPRA Authority which is swallowing return on average Rs. 3.3
billion per year.
NTDCL being the infrastructure based company needs borrowing for expansion
program which results in increase in financial charges.
To seek minimal of 13.11% return on equity as allowed by the Authority in its last
tariff determination of NTDCL.
NTDC sought the following relief: Use of System Charge (UoSC) to recover the total costs of NTDC and return on equity.
As the revenues of NTDC are to be accrued from Use of System Charge, therefore,
NTDC requests NEPRA for increase in the Rate of Use of System Charge. Revenues
and profit positions for the actual and projected period for the year 2011-12 to FY
2014-15 are also depicted in the following table.

Sr/
No

Description

Average monthly Demand (MW)

Demand Growth over last year

Use
of
System
(Rs/kW/Month)

3.2

Expected Revenues

2011-12
Actual

Charge

16,736
100.15

2012-13
Actual

2013-14
(Provisional)

2014-15
Estimated

16,279

16,880

17,594

-2.73%

3.69%

4.23%

85.91

173.67

85.91

102.43
(Mln. Rs.)

18017

16782

19,836

36,668

Proceedings

3.2.1 In terms of rule 4 of NEPRA Tariff (Standards & Procedure) Rules, 1998 (hereinafter
referred as the Rules", the petition was admitted by the Authority on15.10.2014 and in
terms of sub-rules (5) & (6) of rle 4 and rule 5 of the Rules, notice of admission containing
salient features of the petition was published in the national newspapers. on November 1,
2014. Individual letters were also communicated to the stakeholders. The petition was
uploaded on NEPRA website i.e. www.nepra.org.pk for comments / input of the
stakeholders.
3.2.2 In response to the notice an intervention request was received from Anwar Kamal Law
Associates and Multan Chambers of Commerce & Industry participated as commentator

Determination of the Authority in the matter of NTDC

No. IVEPRA/TRF-277/NTDC-2014

The same were allowed by the Authority during the hearing dated 14.11.2014. The stance
taken by the intervener and commentator is given hereunder:4

Mr. Anwar Kamal - Intervener

4.1

The intervener has raised following questions: In view of Article 7 of the NTDC's license, what is the model and what is the function
of CPPA? Having passed more than two years since 2012, What is the current legal
status?

Does the NTDC license / model envisage just transmission lines or more? If more, then
where are the necessary Rules etc. governing the matter?

NTDC has taken a syndicated loan of Rs. 22 billion to facilitate GENCOs to enter into
PPA with RPPs. What is the status of this loan and has NTDC repaid this entire loan
after the RPPs are reported to have settled the matter, repaid the loan through the
National Accountability Bureau (NAB) in consequence of the Supreme Court of
Pakistan judgment in the matter?

Have NTDC's receivables of Rs. 31 billion from K-ELECTRIC till 2008 been settled? If
so, what is the settlement?

In 2008 the marginal rate being charged by CPPA to K-ELECTRICO was changed to
the Ex-WAPDA DISCOs rate. What was the effect of this on the consumer of ExWAPDA DISCOs?

Multan Chamber of Commerce & Industry - Commentator.

5.1

The president of the MCCI during hearing appreciated the presentation of the petitioner
and stated that tariff may not be increased considering the current industrial troubles.

5.2

It was also decided by the Authority to conduct a hearing to arrive at a just and informed
decision. The date of hearing was fixed as 14.11.2014 to be conducted in Avari Hotel
Lahore. The venue, time and date of hearing was also notified to all concerned.

5.3

On the basis of pleadings, the following issues were framed to be considered during the
hearing and for presenting oral and documentary evidence:i)

'Whether the following Authority's directions given in the tariff determination for
FY 2012-13 are complied with?
to carry out independent study with respect to T&T losses.
to indicate the cost & benefit analysis of the new recruitment.
to indicate the cost benefit analysis of new investment p ogram.
to develop the mechanism in consultation with the K- LECTRIC for supply of
electricity and submit for Authority's consideration.

Determination of the Authority in the matter of NTDC

No. IVEPRA/TRF-277/NTDC-2014

to interconnect all upcoming renewable energy power projects before

achieving their COD on priority basis from investment allowed.
to obtain NOC from the petitioner in four weeks time and after issuance of
NOC the interconnectivity will be the responsibility of the petitioner.
to finalize the Energy Purchase Agreements with the renewal energy projects.
to provide detailed analysis/impact of the 132 KV system to NEPRA with the
proposal that whether the petitioner will take over this system or cost has to be
accounted for in DISCOs accounts.
To provide details with respect to transmission and transformation agreements
with DISCOs/BPC.
Develop a strategy/plan to recover its receivables and settle payables and
updating Authority periodically.
Grid stations book values to be worked on accurately for claiming expenditures
thereon.
ii)

Whether the Petitioner's projected General Establishment & Administration

(GE&A) Costs for Rs. 6,426 million for FY 2014-15 based on provisional figure of
Rs. 5,459 million in FY 2013-14 showing an increase of 18% is justified?.
iii)
Whether the projected increase in Repair & Maintenance expenditures for Rs. 845
million for FY 2014-15 based on provisional figure for Rs.607 million in FY 201314 showing increase of 39% is justified?
iv)
-Whether the petitioner's projected insurance of Rs. 132 million for FY 2014-15
against the provisional amount of Rs. 119 for FY 2013-14 showing an increase of
11% is justified?
v)
Whether the petitioner's projected depreciation of Rs. 4,327 million for FY 201415 against the provisional amount of Rs. 4,113 for FY 2013-14 is justified?
vi)
Whether the projected increase in financial charges for Rs.2,576 million for FY
2014-15 based on provisional financial charges for Rs. 1,782 million in FY 2013-14
is justified?
vii)
Whether the Petitioner's projected Return on Equity for FY 2014-15 for Rs.
16,218 million is justified?
viii) Whether the Petitioner's Prior Year Adjustments (PYA) for Rs. 3,610 million for
FY 2012-13 & for Rs. 3,855 million for FY 2013-14 respectively are justified?
ix)
Whether the Petitioner's projected Other Income of Rs. 1,320 million for the FY
2014-15 against provisional amount of Rs. 1,121 million is reasonable?
x)
Whether the proposed Average Monthly MDI MW/Month 17,594 MW by the
petitioner is justified for FY 2014-15.
xi)
Whether the Petitioner's proposed Investment program of Rs 32,625 million for
the FY 2014-15 is justified?
xii)
Whether the petitioner's request for adjustment of T&T losses with an impact of
Rs.2,332.39 million for FY 2012-13 is justified?
xiii) Whether the petitioner's request for adjustment of T&T losses from FY 2009-14
with an impact of Rs. 14,671 million is justified?
xiv) Whether the Annual Development Program for Rs. 811 million for FY 2014-15 is
justified with its cost/benefits?
xv)
Whether the detail of investment program of ongoing and new project and cost
incurred on these projects claimed by the petitioner is justified? Whether the

Determination of the Authority in the matter of NTDC

No. IVEPRA/TRF-277/NTDC-2014

detailed studies have been carried out to indentify new projects? Whether an (n1) criterion has been assured?
xvi) What steps have been taken for undertaking Extra High Voltage (above 500kV
AC) or HVDC system induction in the existing network?
xvii) What steps have been taken for preventing the transmission system breakdowns
resulting in blackouts and tripping during the foggy weather?
xviii) Whether the qualifications of external auditor in financial statements of FY 201213 are justified?
xix) Whether the concerns of the intervener and commentator are justified?
6.

Hearing

6.1

Hearing in the matter was held on 14.11.2014 at Avari Hotel Lahore which was attended
by the Petitioner, intervener, commentator and other stakeholders i.e. media, general
public etc.

6.2

On the basis of the pleadings, record/evidence produced during the course of hearing and
after hearing the parties, the issue-wise findings of the Authority is given hereunder:

7.

Issue# 1Whether the Authority's directions given in the tariff determination for FY 201213 are complied with?

7.1

The NTDC was directed to submit the details with respect to the compliance of the
following Authority's directions:
The Petitioner to carry out independent study with respect to T&T losses.
The Petitioner to indicate the cost & benefit analysis of the new recruitment.
The Petitioner to indicate the cost benefit analysis of new investment program.
The Petitioner to develop the mechanism in consultation with the K-ELECTRIC for
supply of electricity and submit for Authority's consideration.
The Petitioner is required to interconnect all upcoming renewable energy power
projects before achieving their COD on priority basis from investment allowed.
The renewable projects are required to obtain NOC from the petitioner in four weeks
time and after issuance of NOC the interconnectivity will be the responsibility of the
petitioner.
The Petitioner is required to finalize the Energy Purchase Agreements with the
renewal energy projects.
To provide detailed analysis/impact of the 132 KV system to NEPRA with the
proposal that whether the petitioner will take over this system or cost has to be
accounted for in DISCOs accounts.
Provide details with respect to transmission and transformation agreements with
DISCOs/BPC.
Develop a strategy/plan to recover its receivables and settle payables and updating
Authority eriodically.
Grid stati ns book values to be worked on accurately for claiming expenditures
thereon.

Determination of the Authority in the matter of NTDC

No. NEPRA/TRF-277/1V7'DC-2014

8.

Direction # 1 The Petitioner to carry out independent study with respect to T&T losses.

8.1

NTDC submitted that in order to comply with the direction of the Authority, NTDC has
hired Power Planners International through ICB for evaluation of T&T losses of NTDCL
system for FY 2011-12 & 2012-13 thereafter contract was signed on 25-3-2014.

8.2

The Authority during the last determination allowed T&T losses maximum to the extent
of 3%. The Petitioner vide its letter No. GM/PP/CEMP/TRP-226/5087-89 dated
November 24, 2014 submitted report on T&T losses to the Authority. The Petitioner has
complied with the direction of the Authority in this regard.

9.

Direction # 2 The Petitioner to indicate the cost & benefit analysis of the new
recruitment.

9.1

NTDC submitted that the Company could not make general recruitments in FY 2012-13 &
FY 2013-14 against vacant positions due to the ban imposed by GoP. Officers/ officials
were recruited under Aghaz-E-Balochistan Package as detailed hereunder:
BPS
BPS-17 & above
BPS 1-16
Total

No. of Employees
10
176
186

9.2

Analysis and decision in this regard has been discussed under the issue of General
Establishment & Administrative costs at Para 19 below.

10.

Direction # 3 The Petitioner to indicate the cost benefit analysis of new investment
program.

10.1 The Petitioner submitted the following cost benefit analysis of new investment program:
Future planning and forecast of requirement of electricity in the country.
Proper operation, maintenance and reliability of 500 kV and 220 kV Transmission
Lines and Grid Stations.
Proper monitoring and implementation of construction projects
Effective monitoring of billing / recovery from IPP's etc.
To keep the system operative and remove faults with the help of system protection
and Technical Services Group (TS
To facilitate new IPP's for construction of new projects in conventional , solar, and
wind
To accomplish assignments of design both in transmission lines and Grids
To continue watch improvement irk the design of transformers and meter etc through
Design and Standards
Replacement of retired employees

10

Determination of the Authority in the matter of NTDC

No. IVEPRA/7'RF-277/1VTDC-2014

10.2 Analysis and decision with respect to the investment details has been discussed
under the issue of investment program at Para# 28.
11.

Direction # 4 The Petitioner to develop the mechanism in consultation with the KElectric for supply of electricity and submit for Authority's consideration.

11.1

In response to the direction, the Petitioner stated that K- Electric as per clause 2.1 (a) of
Power Purchase agreement (PPA) between the Petitioner & K- Electric is under
obligation to request to the Petitioner to provide Electric Power reasonably required up to
650 MW. Further K- Electric, as per Power Dispatch Methodology is to inform National
Power Control Center (NPCC) by means of written Dispatch instruction for a day on
hourly basis about its reasonable power requirement . NPCC continuously has been
asking K- Electric to provide its generation data to establish reasonability for supply of
power.

11.2 The Petitioner informed that it held a meeting with K- Electric on the subject matter and
K- Electric has never complied with NPCC's written requests regarding Power
withdrawal. K- Electric instead to discuss the issue and comply with NPCC's requests
argued that matter of power withdrawals by K- Electric is under litigation before the
Honorable High court of Sindh and Court has extended interim status quo. Further KElectric refused to discuss the matter till decision of the suit. PPA has already expired on
25th January, 2015.
11.3 No information is provided with respect to the updated agreement with K-Electric.
According to the NTDC the matter is sub-judice. Considering the reason given by the
Petitioner for non-compliance, the Authority directs the petitioner to pursue its
compliance in co-ordination with Ministry of Water & Power.
12.

Direction # 5 The Petitioner is required to interconnect all upcoming renewable energy

power projects before achieving their COD on priority basis from investment allowed.

12.1

In response to the direction of the Authority the Petitioner stated that it has already
provided the interconnection facility to the investors in the renewable sector before the
commercial operation date (COD). Further the following three Plants have not achieved
COD and CPPA/NTDCL has provided them the interconnection facility

49.5MW Three Gorges First Wind Farm

50 MW Foundation wind limited I
50 MW Foundation wind limited II

12.2 NTDC is directed that the renewable energy shall be evacuated on priority basis which is
in line with the Power Policy 2006 & 2013 from the renewable power projects which are
achieving COD in coming months.
13.

Direction # 6 e renewable projects are required to obtain NOC from the petitioner in
four weeks tim and after issuance of NOC the interconnectivity will be responsibility of
the petitioner
11

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/NTDC-2014

13.1

The Petitioner did not reply to this direction of the Authority. The Petitioner is therefore
directed to submit the status in this regard within one month of issuance of this
determination.

14.

Direction # 7 The Petitioner is required to finalize the Energy Purchase Agreements with
the renewal energy projects.

14.1 The Petitioner submitted that it has signed EPAs with the following wind energy IPPs.
Fauji Fertilizer Company Energy Ltd.
Zorlu Energy Pakistan Ltd.
M/s Foundation Wind Energy-I Ltd.(FWEL-I)
M/s Foundation Wind Energy-II Ltd. (FWEL-II)
Three Gorges First Wind Farm Pak (Pvt) Ltd
Sapphire Wind Power Company (Pvt)) Ltd.
Metro Power Company (Pvt) Ltd.,
Sachal Energy Development (Pvt) Ltd.,
Younas Energy Ltd.,
Hydro China Dawood Power Ltd.

April 5, 2011
Jan 12, 2012
Dec 20, 2012
Dec 20, 2012
Jan 4, 2013
Feb 20, 2014
Feb 26, 2014
Feb 27, 2014
Mar 26, 2014
Sep 5, 2014

14.2 Further the Petitioner has signed EPAs with following Bagasse/Biomass Co-generation
Power Projects.
M/s JDW Unit - II Rahim Yar Khan
M/s JDW Unit - III Ghotki Sindh
M/s Chiniot Power Ltd., Chiniot
M/s RYK Mills Ltd., Rahim Yar Khan

Mar 20, 2014

Mar 20, 2014
Jul 22, 2014
Oct 10, 2014

14.3 EPAs under negotiations with various Wind Power Plants (WPPs) are as under:1.Tenaga Generasi Ltd.,
2. Master Wind Energy Ltd.
3. Zephyr Power Ltd.,
4. Gul Ahmed Energy Ltd.,
5. Wind Eagle Ltd (Technology Plc Ltd.)
6. HAWA Holding Ltd.,
7. United Energy Pakistan Ltd.,
8. United Energy Pakistan Ltd.,
9. Jhimpir Wind Power Ltd.,
10.Tapal Wind.,
11. NBT Wind Power Pakistan (Pvt Ltd.

12

Determination of the Authority in the matter of NTDC

No. IVEPRA/TRF-277/1V7'DC-2014

14.4 EPA's under negotiation with various Bagasse/Biomass Co-generation Power Projects are
as under:
1.SSJD Bioenergy Ltd.,
2. Hamza Sugar Mills Ltd.
14.5

Most of the solar power plants are also in the process of finalization. NTDC is directed to
provide the detailed power evacuation plan for the upcoming renewable power projects
within one month of issuance of this determination.

15.

Direction # 8 To provide detailed analysis/impact of the 132 KV system to NEPRA with

the proposal that whether the petitioner will take over this system or cost has to be
accounted for in DISCOs accounts.

15.1

In response to the above direction, the Petitioner stated that it is not advisable to take
over the DISCOs 132/66 kV Grid Station at this stage after lapse of 16 years due to
following facts.

If the existing 132 kV system is merged again in NTDC, the responsibility of

operation & Maintenance staff will increase because the equipment e.g Isolators,
Transformer etc. are huge in number & deteriorated and mostly 132 kV breakers
have been by passed at grid stations due to defect in breakers.

A major bottleneck of taking over 132 kV system would be the transfer of assets
from DISCOs to NTDCL.

In case 132 kV network are given back of NTDC, what will be administration
setup of new structure What will be the fate of SMS project and CDPs which are
installed at 132 kV side of transformers feeding concerned DISCOs and
accountability of sold units lines on DISCOs.

How the lines losses will be calculated for NTDC.

15.2 The Authority considers that this issue needs to be discussed and addressed separately
after consultation / input of the stakeholders. In view thereof a separate proceedings be
initiated separately for resolving the subject issue.
16.

Direction # 9 Provide details with respect to transmission and transformation agreements

with DISCOs/BPC.

16.1

The Petitioner stated that Energy sale agreement (ESA) with DISCO's are valid till the
year 2023 for which copies of the agreements have already been provided to the
Authority. Further the Power purchase agreement (PPA) with K-Electric is valid till
January 25, 2015. Transmission harges are charged as per NEPRA provided mechanism
given in the Petitioner's tariff.

13

Determination of the Authority in the matter of NTDC

No. NEPRA/I'RF-277/NTDC-2014

16.2 NTDC has complied with the Authority's directions. However, the Petitioner is directed
to provide the copy of the agreement when it is finalized with K-Electric.
17

Direction # 10 Develop a strategy/plan to recover its receivables and settle payables and
updating Authority periodically.

17.1 The Petitioner submitted that the collection of funds from DISCOs is mainly monitored
by PEPCO. CPPA is regularly monitoring its receivables from DISCOs however the
receivables are mainly dependent on the consumer-end tariff and payments of the Tariff
Differential Subsidy (TDS) by the GoP. The Petitioner presented the following table for its
receivables.
FY2011-12

FY 2012-13

FY 2013-14

704,668

257,969

298,538

17.2 The Petitioner submitted the draft audited accounts according to which the receivables
status is different. The draft audited accounts are as under:
n
Distribution Company

2014

PESCO
K-Electric
FESCO

2013
119,895

51,918

35,174

32,182

4,208

7,356

MEPCO

12,935

19,603

QESCO

81,730

27,571

GEPCO

1,006

10,503

IESCO

35

12,163

48,464

26,528

LESCO

543

22,562

SEPCO

45,597

18,071

HESCO

Un-billed cost of electrcity

Total

7,631

6,424

357,219

234,882

17.3 The receivables situation demand urgent steps to be taken by NTDC since non-recovery
of the dues ultimately affect the routine maintenance of the NTDC system as well as
construction of the transmission lines for upcoming power projects. It has been observed
that the transmission system is not feasible to evacuate the electricity from the different
power projects. In the recent cases the evacuation from Uch-II, Engro etc is the example
of the poor transmission lines which are unable to evacuate the electricity . The demand
supply gap is increasing and if the necessary steps in this regard have not been taken and
rehabilitation of the transmission lines have not been made the whole transmission
system across the country would be badly affected. Furthermore, the investment of new
power projects would also be affected and the end-consumer would be burdened due to
the Capacity Charge payments without getting single unit from these projects. The nonpayments also enhance the circular debt in the country. In view thereof NTDC is directed

NEPRA
4

' AUTHORITY

bN

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/N7'DC-2014

to take necessary measures for improving recovery situation and take up this issue with
the GOP in order to resolve the matter.
18

Direction # 11 Grid stations book values to be worked on accurately for claiming

expenditures thereon.

18.1

The Petitioner submitted that it has worked out the book values of all grid stations of
500Kv and 220 KV as on 30-6-2013. The following table provides the cost and
accumulated depreciation to work out the book value thereof.
Book Value of Grid Station Equipment for FY 2012-13
Rs. in Millions
Description

Cost

Acc Dep

Book Value.

500 Kv Grid Stations

41,009

16,948

24,060

220 Kv Grid Stations

15,590

5,991

9,600

Total

56,599

22,939

33,660

18.2 The Petitioner has complied with the Authority's direction. The claim has been
substantiated with the documentary evidence.
19

Issue#2 Whether the Petitioner's projected General Establishment & Administration

(GE&A) Costs for Rs. 6,426 million for FY 2014-15 based on provisional figure of Rs.
5,459 million in FY 2013-14 showing an increase of 18% is justified?

19.1

General Establishment Expenses

19.2 The Petitioner submitted that General Establishment includes Pay and Allowances,
Employee Benefits, Staff Cost, and other Admin expenses. General Establishment
requested by NTDC includes Pay and Allowances, Employee Benefits, Staff Cost, and
Other Admin expenses. NTDC requested the Authority to allow Rs. 6,426 million for FY
2014-15. The Authority allowed Rs. 4,825 million to NTDC on account of General
Establishment and Administration expenses for the FY 2012-13. NTDC also stated that it
intends to hire 1,651 employees for critical posts which attributes to Rs. 304 Million for
remaining eight months period keeping in view recruitment plan for FY 2014-15.
19.3 The details general establishment expenses have been discussed as under:
19.4

Salaries, Wages & Other benefits including induction Plan

19.4.1 According to the Petitioner being a public sector entity the pay scales of GoP is followed,
hence any increase in salary and other employee benefits approved in finance bill by GoP
have to be adopted by the Company under the terms of employment. The estimate

Determination of the Authority in the matter of NTDC

No. NEPRA/TRF-277/NTDC-2014

increase of Rs. 5,670 million for the FY 2014-15 is around 23.07% over the provisional
figures of Rs. 4,607 million for the FY 2013-14. While justifying the increase in the pay
and allowances and employees benefits, NTDC stated that GoP has granted 10% adhoc
relief on running basic pay in the annual budget for FY 2013-14, a premature increment
also granted to employees on up-gradation of posts. The Impact of annual increment at
the rate 6% and one running basic pay was granted to employees on the occasion of Eidul-Fitr. These factors resulted in overall 13.6 % increase in pay & allowances and
employee benefits. NTDC further stated that for the FY 2014-15 GOP announced adhoc
relief of 10/0. Similarly increased the conveyance allowance @ 5% to employees of BPS 1
to 15, 20% increase in Cash Medical allowance to employees of BPS 1-15, grant of
premature increment to employees of BPS 1 to 4. Moreover employee benefits include
house acquisition with 25% projected enhancement in rental ceiling of acquired houses
which is due to be enhanced by GoP, as per practice, during current i.e FY 2014-15. The
aforementioned factors attribute an overall increase of 15% in this head.
19.4.2 The breakup of the previous years of the salaries, wages & post retirement benefits,
employees benefits and leave encashment is as under:
Rs in
2011-12
2012-13
2013-14
2014-15
Actual
Actual
Provisional Projected
Pay & Allowances
2,253
2,594
2,801
3,242
Employees & Benefits
699
724
849
1,072
Pension fund
723
1,501
957
1,052
New Hiring
304
Total
3,675
4,819
4,607
5,670
19.4.3 The Petitioner in support of new induction stated that its work force and line staff is a
backbone of its progress. The management of the Petitioner along with its team is striving
hard to ensure an efficient transmission network in view of increasing load growth and
economic activity. To ensure efficient transmission network, the Petitioner needs
competent and skilled professionals in technical, finance and administrative areas of the
company. Currently the Petitioner is a staff deficient company and endeavoring to
provide reliable, transmission of electricity to DISCOs and K-Electric. This situation also
emerges as a result of heavy turnover due to retirement as witnessed in recent years. The
following analysis clearly describes the shortage of staff in the company. According to
NTDC out of 2,198 sanctioned vacant posts the Petitioner intends to hire 1,651 employees
for critical posts which attributes to Rs. 304 Milli n for remaining eight months period
keeping in view recruitment plan for FY 2014-15.

"C?:
Lid NEP RA
AUTVWRITY

16

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/NTDC-2014

. gul.c.s 111 LNUS

Sr.
No.

Workin

Description

Sanction
Strength Regular Contras

Officers BPS-17 &ABOVE

a
Technical
1,051
b
Non Technical
241
Officials BPS 1 To 16
a
Technical
3,433
b
Non Technical
4,398
c
Supportive
1,730
Sub Total
9,561

Strength
Daily
Wages

Deficuency

Total

%age

914

11

925

126

11.99%

190

199

42

17.43%

2,589

209

16

2,752
1,181

443
117

21

2,814
3,216

619
1,182

35

1,333

397

26.88%
22.95%

6,522

769

72

7,363

2,198

22.99%

18.03%

19.4.4 For smooth operation of transmission and transformation NTDC's role is very important.
NTDC have never been restricted from hiring. However, being custodian of the rights of
the end-consumer the hiring of the licensees needs to be rationalized in accordance with
the best international practices adopted in other countries. The cost of hiring is borne by
the end-consumer therefore in return a better service is the right of the end-consumer.
However the recent tripping in last month indicates that a diagnostic analysis needs to be
carried out of the NTDC in order to identify the problematic area which requires
improvement. NTDC should hire the relevant staff with the objective to provide the
better service to the end-consumer.
19.4.5 In the instant case NTDC have also requested for amount of Rs. 304 million on account of
additional hiring. The Authority during the determination for the FY 2012-13 directed
NTDC to provide proper justification for the new hiring. NTDC has submitted response in
the matter. Till to date no new hiring has been made by the NTDC. The Authority
considers that it would be unfair to allow the amount which is not yet incurred. In view
thereof, after adjusting the amount of Rs. 304 million, the salaries, wages, post-retirement
benefits has been worked out as Rs. 4,314 million as against the requested amount of Rs.
5,670 million. Keeping in view the above, for smooth operation of the transmission and
transformation system, the Petitioner is allowed recruitment of employees subject to the
provision of detailed justifications.
19.5

Other General Establishment & Administrative Expenses

19.5.1 The Petitioner in the instant case requested the Authority to allow Rs. 756 million on
account of Vehicle expense, Travelling, Utilities, rent, rate & taxes, Charges for Common
Services (AOH), Professional fees/Management Fee, office supplies, Advertisement &
publicity, Outside Services Employed and Misc. Expenses. As per the provisional figure
provided by the Petitioner the cost on the aforementioned item was Rs. 681 million for
FY 2013-14 against the determined amount of Rs. 599 million for FY 2012-13. This
indicated that the Petitioner demanded 11% increase as against the pr visional account.
The Petitioner in this regard provided the details which are as under:

17

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/N7'DC-2014

II., 41, ,111

Description
Vehicle Expenses Maintenance
Travelling Expenses
Utilities
Rent, Rates And Taxes
Charges for Common Services (AOH)
Professional Fees/ Management Fee
Offices Supplies and Other Expenses
Advertising and Publicity
Outside Services Employed
Miscellaneous Expenses
Total
Increased % age

2009-10 I 2010-11 I 2011-12 I 2012-13

2013-14
2014-15
Actual
Provisional Estimated
154.90
167.01
204.30
234.26
242.85
287.82
65.94
76.18
92.95
122.16
135.52
159.29
43.84
45.52
59.81
108.12
103.11
96.73
32.53
37.69
46.02
72.33
74.19
76.88
27.23
19.53
22.19
32.29
34.64
39.84
13.85
9.04
5.81
14.26
46.09
46.09
14.38
16.69
16.67
16.20
21.42
23.56
1.46
64.35
111.87
1.11
4.67
5.14
31.38
30.29
7.53
12.92
12.94
14.23
14.56
51.96
9.35
2.66
5.72
6.15
400.07
518.27
576.50
616.30
681.15
755.73
29.5%
11.2%
6.9%
10.5%
10.9%

19.5.2 The Authority during the FY 2012-13 allowed Rs. 599 million on account of other general

& establishments' expenses. The actual amount arrived as Rs. 1,059 million. The main
reason for higher cost is Rs. 291 million on account of legal & professional and Rs. 339
million on account of vehicle running expense. It has been further noticed that Rs. 168
million has been incurred on account of travelling expense. The NTDC did not provide
supportive documents in this regard. It has been noticed that the amount requested on
this account is unjustified. The NTDC requested the Authority to allow is Rs. 755.73
million on account of other general & establishment expenses for the FY 2014-15.
Keeping in view the past trends and taking into account the inflation affect, the requested
amount is on higher side and needs to be rationalized. Accordingly the amount of Rs. 624
million has been assessed on this account and the same is allowed for FY 2014-15.
20.

Issue# 3 Whether the projected increase in Repair & Maintenance expenditures for Rs.
845 million for FY 2014-15 based on provisional figure for Rs.607 million in FY 2013-14
showing increase of 39% is justified?

20.1 NTDC submitted that implementation of all of its service standards and improvement of

transmission network is vital to ensure the desire level of reliability of transmission

network. This can only be possible through continuous repair and maintenance of
Transmission Network by NTDC. Presently, NTDCL transmission network 220kV &
500kV Grid Stations/ Transmission lines are a blend of old and new which requires
regular maintenance. Moreover, NTDCL grids/transmission lines confronted with every
increasing demand due to GoP priority/policy to utilize existing capacity at optimum
level, so repair and maintenance will surge up beyond ordinary wear & tear to maintain
reliability and sustainability of the system. During the last couple of years, the
maintenance cost remained on lower side due to almost stagnant growth of generation
coupled with underutilized capacity owing to adverse generation mix.
20.2 According to NTDC, the present Govt. has prioritized the Power sector, in order to deal
with the crises of Power sector, not only started numerous power projects and also

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/N7'DC-2014

emphasized for optimum utilization of available capacity. The continuous increase in the
load has necessitated NTDC to ensure the reliability and sustainability of the transmission
network system. To achieve this level of service NTDC have made a realistic activity wise
detailed budget by keeping in view the transmission system. NTDC requested the
Authority to allow an estimated amount of Rs 845.40 Million under head of repair and
considering the grid wise requirements.
AM

Description

2009-10I 2010-11 1 2011-12 1 2012-13

Actual

Average Gross Assets

Repair & Maintenance

Vo age

2013-14

2014-15

movi.iona

Estimated

91,903

102,586

107,991

113,840

125,115

139,959

574

600

545

512

607

845

0.62%

0.58%

0.50%

0.45%

0.49%

0.60%

20.3 The NTDC requested amount of Rs. 845 is 48% higher on the basis of provisional figures
of Rs. 571 million for the FY 2013-14.
20.4 The Authority allowed Rs. 730 million to NTDC on account of repair and maintenance
during the FY 2012-13.The actual amount on account of repair and maintenance for the
FY 2012-13 & FY 2013-14 was Rs. 512 million and Rs. 607 million respectively. Keeping
in view the Authority prescribed formula in the determination dated 19th July 2013 i.e.
0.5% of the gross fixed assets, the repair and maintenance in the instant case on gross
fixed assets of Rs. 127,320 million has been worked out as Rs. 730 million and allowed for
FY 2014-15 as against the requested amount of Rs. 845 million.
21.

Issue#4 Whether the petitioner's projected insurance of Rs. 132 million for FY 2014-15
against the provisional amount of Rs. 119 for FY 2013-14 showing an increase of 11% is
justified?

21.1 According to NTDC, the assets of the company are protected /covered under WAPDA
equipment protection scheme (WEPS), in which value of insurance is calculated @ 0.30%
of book value of Grid Stations. NTDC further submitted that the Insurance cost has been
established at the same methodology. This usually paid on the book value and subject to
change every year.

Description
Book value of Assets
Insurance
%age to Book Value

2009-10 I 2010-11 1 2011-12 I 2012-13

Actual
62,128
66,343
65,583
70,470
76.23
93.27
101.58
102.91
0.12%

0.14%

0.15%

0.15%

2013-14
Pro.
80,037
119.48
0.15%

Rs. Mln
2014-15
Estimated

91,589
132.15
0.14%

21.2 While justifying the increase, NTDC submitted that the increase in insurance cost
estimate is due to addition in fixed assets. NTDC requested the Authority to allow Rs.
132.15 million for the FY 2013-14 against the provisional amount of Rs. 108 million for
the FY 2013-14 showing an increase of 11%. The Authority in the determination for the

Determination of the Authority in the matter of NTDC

No. NEPRA/TRF-277/NTDC-2014

FY 2012-13 determined Rs. 112 million on account of insurance. The breakup provided by
NTDC is given hereunder:
Description
Book value of V-,ets

Insurance
%age to Book Value

2009-10 I 2010-11 I 2011-12 I 2012-13

Actual
62,128
76.23
0.12%1

66,343
93.27
0.14%I

65,583
101.58
0.15%1

2013-14
Pro.

70,470
102.91
0.15%

....- ,.....
2014-15

80,037
119.48

Es deleted

91,589
132.15

0.15%

0.14%

21.3 The NTDC's calculation in the matter is not correct. The actual amount for the FY 201213, provisional for the FY 2013-14 and projected for the FY 2014-15 is on the basis of
0.14% instead of 0.30%. Keeping in view the actual trend, the grid stations increase seems
not realistic. It has been assessed that the new grid stations will be less as compared to the
requested by NTDC. After adjusting the same with the previous year the estimate grid
stations for the FY 2014-15 is Rs. 85,037 million. On the basis of 0.14% the insurance
amount in the instant case has been worked out as Rs. 119 million and the same is allowed
for the FY 2014-15.
22.

Issue#5 Whether the petitioner's projected depreciation of Rs. 4,325 million for FY 201415 against the provisional amount of Rs. 4,113 for FY 2013-14 is justified?

22.1 NTDC submitted that depreciation is also a component which may change as a result of
addition or deletion in the fixed assets and would require adjustments accordingly. The
depreciation for FY 2013-14 has been recorded as Rs.4,113 Million and the depreciation for
FY 2014-15 is calculated on the basis of (i) Value of existing assets, (ii) Additions in existing
assets during the FY 2014-15. NTDC submitted that the assets were depreciated on the
basis of straight line method as per power sector practice i.e Land @ 0%, Civil works and
building @ 2%, Transmission & Dispatch Equipments @ 3.5%, Furniture and fittings, other
office equipments & Vehicles @ 10%. Based upon these assumptions the deprecation is
worked out as under.

Description
Assets
Amount of Depreciation
age to Gross Assets

2009-10 I 2010-11 I 2011-12 I 2012-13

Actual

2013-14

Rs. Mln
2014-15

Provisional Es timated

98,659

106,512

109,470

118,210

132,020

146,054

3,782

3,639

3,717

3,854

4,113

4,325

3.8%

3.4%

3.4%

3.3%

3.1%

3.0%

22.2 The depreciation allowance of Rs 4,325 requested by the Petitioner for FY 2014-15 is
allowed as reasonable against the provisional figure of Rs.4,113 for FY 2013-14.
23.

Issue#6 they the projected increase in financial charges for Rs.2.576 million for FY
2014-15 b d on provisional financial charges for Rs. 1,782 million in FY 2013-14 is
justified?

20

Determination of the Authority in the matter of NTDC

No. NEPRA/7'RF-277/NTDC-2014

23.1 NTDC requested the Authority to allow Rs. 2,576 million on account of financial charges
for the FY 2014-15 as against the provisional amount of Rs. 1,782 million of the FY 201314. NTDC loans pertain to foreign loans obtained by GoP from donors agencies like
World Bank, ADB, JICA, KFW (Germany), and EDCF(Korea) which have been relent to
NTDC @ 12% - 17% markup in accordance with relent policy of GoP. As per current
relent policy GoP charges @ 15% markup on such loans. Moreover, some of the projects
like Sahi-wal Sub Stations (SSS), K-ELECTRIC Interconnection, Muzaffar Garh Gatti
Transmission Line, and Extension of 8-Sub Stations Project have been financed through
local borrowing for which NTDC has taken local loans @ 6-Month KIBOR plus 2% to
2.15 % for these projects. The breakup of financial charges provided by NTDC is as under:

Description
Thtal Financial Charges
Allocated to WIP
Charged to Operation

2009-1012010-111 2011-12 12012-13

2013-14

2014-15

Actual

Provisional

Estimated

1,848

2,552

4,455

4,305

5,270

7,030

819

1,570

3,650

3,557

3,488

4,454

1,029

982

805

749

1,782

2,576

23.2 The Authority during the FY 2012-13 assessed Rs. 3,729 million on account of financial
charges whereas the actual financial charges are Rs. 749 million. The Petitioner was
directed to substantiate its claim through provision of audited accounts. NTDC submitted
the provisional accounts which are not justifying the claim of the Petitioner of Rs. 1,782
million on account of financial charges. It has been noted that Rs. 848 million has actually
been charged to P&L account. Even in the FY 2012-13, the petitioner could only manage
to charge Rs. 749 million against financial charges. Keeping in view the past trend of
allocation of financial charges to the Profit & Loss Account, the amount of Rs. 848 million
has been assessed for FY 2014-15 in the instant case on account of financial charges and
the same is allowed.
24

Issue#7 Whether the Petitioner's projected Return on Equity for FY 2014-15 for Rs.
16,218 million is justified?

24.1 NTDC submitted that the Company was allowed Return of Equity (ROE) of 12.75% as
determined by the Authority for the determination of 2004, 2006 & 2011 and improved
ROE to 13.11 % in the determination of 2012-13 against requested ROE of 14.66% to
enable NTDC to maintain, develop and provide reliable services for the evacuation of
electricity from all the generation points across the country to at all level of transmission
lines. NTDC still believes that the ROE desired @ 14.66% in the last tariff petition is
legitimate keeping in view the market conditions. However NTDC has calculated return
on equity @ 13.11% for FY 2014-15 as per NEPRA's last tariff determination. The Equity
Base (EB) on which the return is worked out remains the same for the calculation
of
ROE for FY 2014-15.
24.2 According to the draft balance sheet as on June 30, 2014 the Petitioner's net fixed assets in
operation were Rs. 66,179 million, stores and spares were Rs.9,205 million (including
stores held for capital expenditure that could not be identified separately), trade debt

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/NTDC-2014

were to the tune of Rs.357,219 million, cash and bank balances were Rs. 19,114 million
and capital works in progress was Rs.59,735 million. The long-term liabilities were
Rs.35,179 million, employees' retirement benefits Rs. 16,262 million and creditors,
accrued and other liabilities were Rs.535,518 million. Incorporating the corresponding
estimated figures as discussed in earlier paragraphs the EB for the FY 2014-15 is assessed
as Rs.71,510 million (detailed working indicated as Annexure I & II). Accordingly ROE
for the FY 2014-15 has been assessed as Rs. 9,375 million against Rs. 16,218 million
requested by the Petitioner.
25

Issue#8 Whether the Petitioner's Prior Year Adjustments (PYA) for Rs. 3.610 million for
FY 2012-13 & for Rs. 3,855 million for FY 2013-14 respectively are justified?

25.1

The Petitioner claimed prior year adjustments of Rs. 3,610 million and Rs. 3,855 million
for the FY 2012-13 & FY 2013-14 respectively. In order to justify its claim for PYA, the
Petitioner submitted the working for un-recovered costs as per following details:-

a.

Unrecovered Cost of FY 2012-13

25.2 According to the Petitioner NEPRA allowed revenue requirement amounting to Rs.
21,137 million for the FY 2012-13 was determined on July 19, 2013 which was notified on
September 24, 2013. The tariff was notified in FY 2013-14 and due to delayed tariff
determination and notification warrants the Petitioner to claim unrecovered cost in the
present tariff petition accordingly. The detail of uncovered cost for FY 2012-13 is
summarized below:
Rs (Million)
Revenue determined by NEPRA for FY 2012-13
21,137
Actual Revenue earned for FY 2012-13
(16,782)
Total Variance
4,355
25.3 According to NTDC total variance is comprised of two variances i.e Price variance and
Volume variance.
Price Variance
[Tariff rate determined (2012-13) Tariff rate applied (2011-12)) x Average Actual MDI
for FY 2012-13
(Rs.102.43 Rs.85.91) x 16,279* MW

=Rs.3,227 Million

Volume Variance
(NEPRA determined MDI Actual MDI) x Rate Determined by NEPRA
(17,196 MW 16,279 MW) x Rs.102.43**
Total Variance =

=Rs.1,128 Mi ion

Price Variance + Volume Varianc

22

Determination of the Authority in the matter of NTDC

No. 1VEPRA/7'RF-277/N7'DC-2014

Total Variance =

(3,227 +1,128) = Rs. 4,355 Million

*Average Monthly MDI

** Rs./kW/Month
b.

Adjustment of Loans against K-ELECTRIC (now K-Electric) payables towards NTDC

25.4 The Petitioner submitted that K-Electric was charged hourly marginal cost rate for billing
of energy cost. Economic Coordination Committee (ECC) of the Cabinet on September 03,
2008 decided that K-ELECTRIC (now K-Electric) would be treated at par with DISCOs for
invoicing/billing of energy cost purposes. Accordingly a committee was constituted for
determination and settlement of balances between NTDC and K-ELECTRIC. On the
recommendations of ECC it was decided that a partial transaction of difference between
the two rates amounting to Rs. 31,000 Million would be settled by Government of
Pakistan (GoP) with NTDCL against GoP Foreign Relent Loans including outstanding
markup of Rs. 24,610 Million but adjustment of this transaction by GoP is still awaited.
Therefore, NTDC continued to incorporate accrual of markup in its books for the period
from FY 2009-10 to FY 2011-12 amounting to Rs. 9,050 Million, out of which Rs. 5,892
Million were expensed out as financial charges charged to operations with yearly impact
of Rs. 1,964 Million as accrued expense and balance amount of Rs. 3,158 Million were
charged to WIP as IDC. In June 2013 GoP adjusted Rs. 2,540 Million as non cash
adjustment and did not claim any markup on the balance outstanding amount of loan.
Therefore, NTDC has reversed accrued markup charged up till now. This debt-equity
swap has impact on component of Use of System Charge (UoSC). In the preceding years
these loans were considered as part of debt portion in the capital structure of the
Company and used to accrue financial charges on these loans. Thus the capital structure of
the Company has been transformed in which loans were reduced and equity has risen by
corresponding amount of loan. Resultantly financial charges of the company will be
reduced and return on equity component of Use of System Charge (UoSC) has also
increased.
25.5 In the wake of above situation the whole transaction has been observed since its inception
within the tariff regime of NEPRA. It reveals that tariff will not be significantly impacted
as it is a mere change in the head of revenue requirement.
25.6 However, an overall impact has been calculated to the tune of Rs 745 Million which has
been over claimed by the petitioner since the occurrence of this transaction and the same
has been adjusted in the Uncovered Cost of FY 2012-13. A comparison of financial
charges claimed in the tariff and resultant increase in return on equity is tabulated low:

23

Determination of the Authority in the matter of NTDC

No. IVEPRA/TRF-277/1V7'DC-2014

00.

.,...3 1.V.L.L11

Actual
2008-09

Actual
2009-10

Actual
2010-11

Actual
2011-12

ROE after adjustment of KESC Loans (excluding Loans)

8,894

' 9,401

10,290

11,125

39,710

ROE without adjustment of KESC Loans (including loans)

6,633

7,453

8,564

10,089

32,739

Description

Total

Difference

(A)

2,262

1,949

1,726

1,035

6,971

Accrued mark-up expensed out

(B)

1,824

1,964

1,964

1,964

7,716

Net (Benefit) /Loss to NTDCL (A-B)

437

(15)1

(238)1

(928)

25.7 The Petitioner was directed to provide the documentary evidence along with calculations
in this regard. According to the draft audited accounts the amount has been verified on
this account. After considering the draft audited accounts net uncovered cost for the FY
2012-13 after adjustment of K-ELECTRIC loans is as follows:
Total (Price & Volume) Variance
Adjustment of K-ELECTRIC loans
Net Uncovered Cost For FY 2012-13

=
=
=

4,355
( 745)
3,610

25.8 After analyzing the submission of the Petitioner regarding PYA for FY 2012-13, the
stance of Petitioner is justified due to the delayed tariff notification which was issued in
September 2013 after the lapse of FY 2012-13. Accordingly the assessed amount of Rs.
3,610 million is included in revenue requirement of the Petitioner for the FY 2014-15.
c.

Uncovered cost for FY 2013-14

25.9 The Petitioner submitted that the tariff for FY 2012-13 was notified in FY 2013-14
therefore NTDCL could not file tariff petition for FY 2013-14. Resultantly NTDCL was
remained unable to fulfill its entire financial obligations. According to NTDC the tariff for
the FY 2013-14 has been calculated in line with the tariff methodology of NEPRA and the
same has been compared with the provisional results of FY 2013-14. NTDC requested t e
Authority to allow Rs. 3,855 million on account of uncovered cost for the FY 2013-14. ,q
N-Y/

24

(745)

Determination of the Authority in the matter of NTDC

No. NEPRA/TRF-277/1VTDC-2014

Sr
No

Revenue Requirment

GE&A (including CPPA)

NEP RA
Rs .102.43
/kW/Mont

2013-14
(P ro v)

Uncovered

cost

Desired

FY 2013-14

4,825

5,459

634

Repair & Maintenance

595

607

12

Insurance

112

119

Depreciation

4,083

4,113

Financial Charges

3,729

1,782

(1,947)

Transmission Losses

Return on Equity

Income Tax

Total

10
11

Less: other income

Total Revenue Requirment

30

1,125

(1,125)

9,329

7,739

13,569

5,829

22,673

20,944

13,569

3,440

(1,536)

(1,121)

21,137

19,823

415
3,855

25.10 The NTDC did not submit the petition for determination of transfer/wheeling charges for
the FY 2013-14. The inefficiency of the Company cannot be passed on to the endconsumer. The NTDC's stance therefore in this regard is not correct since the
responsibility of the filing of the petition for justification of the claim lies upon the
Petitioner. The self assessment of the NTDC is therefore not acceptable. In view thereof
the NTDC's request on this account is not accepted.
26.

Issue#9 Whether the Petitioner's projected Other Income of Rs. 1,320 million for the FY
2014-15 against provisional amount of Rs. 1,121 million is reasonable?

26.1 According to NTDC other income includes income of services rendered to DISCOs, IPPs
in shape of planning, telecommunication, design, mark up on bank deposits, amortization
of deferred credit, etc. NTDC submitted that due to declining trend in KIBOR rates during
the preceding years, there has been a decline in profit rates on bank deposits. The average
annual increase during the last three financial years has been applied on the estimation of
profit on bank deposits and income of service rendered to DISCOs and IPPs.
Rs. Mln

Description

2009-101 2010-11 2011-12 2012-13 2013-14 2014-15

Actual
Other Income

1,096

1,127

1,396

1,040

Prov:

Esti:

1,121

1,320

26.2 The Authority during the FY 2012-13 assessed Rs. 1,726 million on account of other
income whereas the actual amount was Rs. 1,040 million. Considering the previous trend
of the other income the requested amount seems reasonable therefore Rs. 1,320 million is
assessed for FY 2014-15.
27.

Issue#10 Whether the proposed Aver e Monthly MDI MW/Month 17,594 MW by the
petitioner is justified for FY 2014-15.

25

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/NTDC-2014

27.1 NTDC calculated the revenue requirement on the basis of average monthly MD/month of
17,594 MW for the FY 2014-15. According to NTDC, overall 4.23% growth of MDI
(Maximum Demand Indicator) MW for FY 2014-15 is assumed and therefore estimated
demand worked out on the basis of DISCOs projected demand of 4.78 % and same has
been attributed to DISCOs after considering the flat demand of 650 MW of K-Electric.
27.2 LESCO vide its letter No. 253/CEO/LESCO dated March 2, 2015 raised few reservations
regarding the calculation of Maximum Demand Indicator (MDI) which is being charged
as per the non-coincidental basis.
27.3 The Authority noted that the Petitioner was directed in the tariff determination dated 9th
May 2011 to install the digital meters at Common Delivery Points (CDPs). During the
hearing on the query of the Authority, it was responded by the NTDC that the digital
meters have been installed at CDPs. The Authority considered that in accordance with
the previous determination, MDI should be charged on the maximum demand recorded
on the Common Delivery Points (CDPs) of the DISCOs during the billing period at the
particular time on coincidental manners. In order to arrive at just and informed decision,
the Authority considered it appropriate to arrange the consultative session of the
CPPA/NTDC and Distribution Companies.
27.4 Accordingly the consultative session was arranged on 19th March 2015. Individual letters
in this regard were issued to CPPA/NTDC, LESCO, GEPCO, FESCO, MEPCO, LESCO,
IESCO, HESCO, SEPCO, PESCO and TESCO. The CPPA is charging MDI on
Authority's determined mechanism which is as under:
XWD = The sum of the maximum demand of the XWDISCOs in KW recorded during a
billing period at all the delivery metering points at which power is received by
the XWDISCOs.
27.5 During the meeting CPPA/NTDC and Distribution Companies discussed the calculation of
MDI and have showed certain reservations. Accordingly CPPA / NTDC and Distribution
Companies were directed to come up with the agreed mechanism. In response only
LESCO & SEPCO have submitted the comments. NTDC also on 31st March 2015
submitted the following comments;
NTDCL charges Capacity Transfer Price and transmission / wheeling charges to a
DISCO on the basis of Maximum Demand recorded during a billing period as per
NEPRA approved mechanism in its tariff determination. Maximum demand (kW)
of DISCOs is measured through digital energy meters installed at their electrical
boundaries called Common Delivery Points (CDPs) by designated metering
committee(s) having one member of the respective DISCOs. MDI being charged is
worked out on non-coincidental basis.
It is pertinent to mention that NTDCL has to recover its Annual Revenue
Requirement of the transmission system from DISCOs through wheeling charges
(Rs./kW/month) as per NEPRA approved mechanism. Consideration of the4
maximum demand data on co-incidental basis may only change the rate of

Determination of the Authority in the matter of NTDC

No. IVEPRA/I'RF-277/1VTDC-2014

wheeling charges (Rs./kW/month) without affecting the NTDCL total annual

revenue requirement.
It is stated that NTDCL, under Secured Metering System (SMS) project have
installed latest Digital Meters at all CDPs throughout the country declaring these
meters as Primary meters and is also in the process of online acquisition of
metering data from these meters. Maximum demand data on co-incidental basis
available online is being complied on the test run basis. Finalization of the same
may take some time. CPPA 1V7DC on finalization of maximum demand data on
co-incidental basis shall be able to share the same with all DISCOs.
27.6 NTDCL have shown its constraints to provide data with respect to the MDI and submitted
that it require some time for finalization of the same. The Authority considers that the
Petitioner's concerns with respect to provision of information are valid. Furthermore, for
the purpose of transparency the required data needs to be shared with the stakeholders for
input /comments. The Authority further considers that the tariff petition of NTDCL is
time bound case and have to be finalized within stipulated time period given in the Tariff
(Standards & Procedure) Rules - 1998 therefore considering the request of the Petitioner
legitimate, the Authority has decided that the current petition be determined on the basis
of existing mechanism of MDI calculation. However, the Petitioner is directed to file the
next tariff petition of FY 2015-16 on the basis of calculation of MDI on co-incidental
basis.
27.7 Keeping in view the current trend of the power generation, the Authority noted that the
NTDC's projected MDI for FY 2014-15 seems on higher side. Although new power plants
have been added however considering the transmission line constraints the MDI per
month needs to be rationalized with the MDI calculated in the case of Distribution
Companies. For Distribution Companies the Authority has assessed MDI of 16,679 MW.
Considering the same assessment of MDI reasonable, the Petitioner's revenue requirement
has been calculated on the basis of MDI of 16,679 MW for FY 2014-15.
28.

Issue#11 Whether the Petitioner's proposed Investment program of Rs 32,625 million for
the FY 2014-15 is justified?

28.1 NTDC has proposed a development program of Rs. 32,625 million for FY 2014-15. The
investment as per audited/draft financial statements showing Rs. 9,757 million for FY
2012-13 and Rs. 23,893 million for FY 2013-14. As per the Petitioner the amount required
for investment is incurred to provide the smooth and reliable services.
Development Program is required for expansion / enhancement of NTDC Transmission
network for evacuation of power to meet future demand of the Distribution Companies.
28.2 While justifying investment program, NTDC submitted that being national Grid Company
of the country, NTDCL is solely responsible for overall reliability, planning and
coordination of the electricity transmission in Pakistan except the area under K-Electric.
The Petitioner has been vigorously pursuing its system expansion / augmentation
especially construction of new grids, transmission lines, adding new transformer at the
existing grid stations and augmentation of the transformers with higher capacity.
27

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/NTDC-2014

28.3 According to NTDC, the announcement of upfront tariff from wind based energy power
projects at Jhimpir and Gharo clusters has attracted interest of investors for more than
2000 MW of generation capacity. Similarly Federal & Provincial governments are
promoting solar energy by attracting fast track projects such as 1000 MW Quaid-e-Azam
Solar Park (a priority of 100 MW up till December 2014), other ongoing prioritized
projects such as 969 MW Neelum Jehlum Hydro Project and 630 MW (2x315) Chashma
C-III & C-IV Nuclear Projects are expected to be substantially completed by the end of
2015. Therefore, it is imperative to build Extra High Voltage (EHV) transmission lines and
grid stations before the COD of these projects. These projects involve substantial capital
investment with PC-I Cost of Rs. 40,115 million for which at present no donor is available
and NTDC own sources/return on equity seems not enough to meet this critical situation.
NTDC management is committed to exert all its optimal efforts to execute these
prioritized projects through return on equity as well as to approach and negotiate for local
financing arrangements keeping in view the limited time constraints. Presently,
negotiations have initiated for local financing in respect of Neelum Jehlum Hydro project
whose priority segment is expected to be completed by December 2015. Further, other
vital projects like Jamshore-Moro, UCH-II high voltage transmission lines etc. have also
been planned and included in the investment plan.
28.4 In addition to above mentioned projects, NTDC is also endeavoring to enhance reliability
of existing transmission network of 500/220kv grid system by deploying 13 Nos
transformers which are being imported from Iran having capacity of 250 MVA each with
PC-I cost of Rs. 3,900 million through own sources. NTDC has also worked out a plan to
replace depleted material /equipment to strengthen the system amounting to Rs 1,739
million to be financed by ADB. NTDC management is also planning for interconnection
facilities to evacuate power from across the border projects like proposed project for
construction of crossborder interconnection transmission line at 500kV in respect of
proposed Central Asia-South Asia (CASA-1000) a 1300 MW project, linking the four
countries Kyrgyz Republic, Tajikistan, Afghanistan & Pakistan, to facilitate the transfer of
surplus power from Central Asian countries to Pakistan and import of 1000 MW power
from Iran to Gawadar. According to NTDC Government of Pakistan in near future is
planning to undertake some new ventures involving extraordinary investment for
erection of power evacuation facilities like Gadani Power Park 6600 MW, KII/KIII 2400
MW Nuclear Project at Karachi and Dasu Hydel Project 4500 MW capacity for which
NTDC present tariff structure would not support, thus NEPRA is requested to suggest
some tariff mechanism to cater heavy financing involved for the execution of these
projects.
28.5 Apart from above new critical projects, NTDC has also executing ongoing projects of vital
importance, some of them are near to completion and others will likely to be completed
in the next 12-24 months. These projects will be a good addition to enhance/strengthen
our transmission system capacities. Keeping in view the prioritized projects NTDCL
Investment Program is made up of two broad categories:
i-

On Going Projects
a) Vital Projects
28

Determination of the Authority in the matter of NTDC

No. IVEPRA/TRF-277/NTDC-2014

b) Other Projects
Description
Local
On- Going Projects
Vital Projects
Other Projects
Sub Total

38,070
19,459
57,529

PC-I Cost
Foreign
48,095
18,936
67,031

Estimated for FY 2014-15

Local
Foreign
Total

Total
86,165
38,395
124,560

3,770
598
4,368

3,400
50
3,450

7,170
648
7,818

28.6 The Project wise detail of NTDCL ongoing vital & other Projects are tabulated below.
--. -.....
Sr
No.
1

Project Name
220 KV G/S at Ghazi Road, Lahore with 220
KV DIG T/Line 132 KV Expansion System
Power Transmission Enhancement Project
(Tranch-II) (SE.1)10 Sub projects
(1) 9 Sub Projects of 500KV & 220KV S/S&
T/Lines
220/132KV Dera Murad Jamali Sub Station
Addition of 500/200KV Sub Station T/L for
Strengtlung the existing NTDC system
i) 500KV Lahore New
ti) 500KV Shikarpur
ni) 220KV D.I.Khan
4 Nos New Projects to be financed by JBIC (i)
500 KV RY Khan G/S & T/L (u)220 KV
Chishtian T/L (m) 220 KV Gujrat G/S & 220
KV T/L (iv) 220 KV Shalamar G/S & 220 KV
T/L (4 Projects - IBIC Loan)
Imported of 100 MW Power from Iran (with
220KV G/S Gowadar and allied T/L form Iran
to Gowader funded by Iran
Power Transmission Enhancement Project
Tranch-I (19 Sub Projects of 500/220 KV Sub
Stations and T/ Lines)
New 220 KV G/Station at Khuzdar/220
KVDadu - Khuzdar D/C T/Line

PC-I Cost
Local I Foreign I

Total

Budgeted for FY 2014-15

Local I Foreign I Total

1,325

1,267

2,592

250

500

750

9,275

10,918

20,193

700

1,000

1,700

415

465

880

500

11,078

13,450

24,528

800

1,000

1,800

5,365

7,787

13,152

500

800

1,300

1,730

1,934

3,664

300

300

4,503

8,114

12,617

320

320

4,380

4,160

8,540

400

100

500

19,459

18,936

38,395

598

50

648

500

9
Others
Total

ii

57,529 I 67,031 I

124,560

4,368 I

3,450 I

7,818

New Projects
a. Critical projects
b. Vital projects
c. Other projects

29

Determination of the Authority in the matter of NTDC

No. IVEPRA/I'RF-277/N7'DC-2014

PC-I Cost

Description
Local

Foreign

Estimated for FY 2014-15

Local I Foreign I Total

Total

New Projects
Critical Projects

19,410
36,172
39,873
95,454 I

Vital Project
Other New Projects
Sub Total

22,047
45,336
81,173
148,555 I

41,456

6,377
2,560
1,070
10,007 I

81,508
121,045
244,009

6,000
6,000
2,800
14,800 1

12,378
8,560
3,869
24,807

28.7 The Project wise detail of NTDCL new critical , vital & other projects are tabulated below:
New-Critical Projects
Sr
No.
1
2
3
4

Project Name
Traansmission for Dispersal power from NeelamJehlum I lydro Power Project
Interconnection of Chashma Neculer
(C-3&C-4)
Quaid-e-Azam Solar Park at Lal-Suhanra (Phase-ID
Evacuation of 600 MW Solar
(Prposed to be carried out by NTDC)
Evacuation of power from wind power projects at
Bumpir and Gharo Wind Clusters
Total

PC-I Cost
Local I Foreign I Total
8,951

12,717

21,668

1,485

1,618

3,103

2,161

1,905

55,996

5,282

18,593 I

1
2
3

Project Name
3rd 500KV Jamshoro-Moro- R.Y Khan Single Circuit
T/Line.Tranch-III
Transmission Interconnection for Dispersal of Power
From UCI I-II Tranch-III
Augmentation of 500/220KV & 220/131KV
Transformer in NTDC System New
Depleted Material Tranch-III
(Now Replacement of Depleted Matrial at existing grid
station of NTDC System)
ADB Loan No. 2846-PAK
Interconnection scheme for import of power from
CASA-1000
Total
Others New Projects
Grand Total

6,000

6,000

1,500

1,500

4,066

1,918

1,918

11,278

2,959

21,522I 40,115

New- Vital Project

Sr
No.

Budgeted FY 2014-15
Local I Foreign I Total

6,377 I

2,959
6,000 I12,378

Rs.Mln
PC-I Cost
Local I Foreign I

Total

17,400

19,834

37,234

500

3,000

3,500

1,219

1,289

2,508

250

1,000

1,250

766

3,129

' 3,894

1,300

336

1,403

1,739

110

1,000

1,110

12,878

16,415

29,293

400

1,000

1,400

74,669

2,560 I

6,000 1

8,560

81,173 I 121,045

1,070 I

2,800 1

3,869

32,599 I 42,070 I
39,873 I

152,984 1 215,586 1 368,569

Budted FY 2014-15
Local 'Foreign! Total

1,300

14,375 I 18,250 I 32,625

Projects completed During FY 2013-14:

28.8 To strengthen the existing well expansion of system the following assets have been
capitalized during 2Q13-14:

30

Determination of the Authority in the matter of NTDC

No, IVEPRA/TRF-277/N7'DC-2014

Sr.
No
1

Name of Projects
220 KV Grid Station Shalamar, Lahore.

220KV Dadu-Khuzdar D/C T/Line & 220KV Grid Station at Kuzdar

220 KV grid Station & Bandala. And Accodated T/Line

220 KV Rohri Grid Station and accodated T/Line

550 Kv D.G Khan SubStation

Up Gradation of NPCC Islamabad

220 Kv Grid Station Loaralai T/L Grid Station

220 KV grid Station & Transmission Line Okara.

Transmission Line Kassowal

Projects Expected to be completed during FY 2014-15

28.9 Following grids /transmission lines are expected to be added in the system during FY
2014-15.
Sr.

Name of Projects

No
1
2

220Kv Toba Tek Singh Grid Station & accodated T/Line T-II
500 Kv Ghazi Barotha Extension T-II

220 Kv Grid Station Kassowal

220 Kv Chishtian

SVC at Kot Lakhpat Lahore

220KV Dadu -Khuzdar D/C

7
8

Sub station & acoodated T/ Line

T/Line & 220KV Grid Station at Kuzdar JICA 220 KV Rohri Grid Station and aa:odated T/Line
Tranche-I, DG Khan-Loralai T/ Line Project

28.10 The analysis of investment in fixed assets over the last three years revealed that the
Petitioner's could spend around Rs. 9.8 billion, Rs. 13.5 billion, Rs. 16.4 billion, Rs. 14.8
billion, Rs.9.8 billion and Rs. 23.9 billion for the FY 2008-09, FY 2009-10, FY 2010-11,FY
2011-12, FY 2012-13 and FY 2013-14 respectively. The Authority allowed Rs. 15.62
billion investment program to the Petitioner in the determination of FY 2012-13 against
the actual amount incurred as per audited accounts of Rs. 9.8 billion.
28.11 The Authority is cognizant of the fact that the Petitioner's submission is quite reasonable
in terms of investment required and in the wake of evacuation of power from the
upcoming power plants. The Petitioner's constraint regarding liquidity crunch can be
analyzed from the financial statements for the last six years. The financing of the
transmission line is the responsibility of the NTDC. The efforts should be made to
complete the abovementioned tasks. NTDC may request the Ministry of Finance through
its parent department Ministry of Water & Power for arrangement of funds. Having
considered all the relevant information and financing plan, the Authority approves the

Determination of the Authority in the matter of NTDC

No. IVEPRA/TRF-277/IVTDC-2014

investment plan of Rs. 18,600 million for the FY 2014-15. The Petitioner can however
undertake the projects which are critical in order to ensure power evacuation of
upcoming power projects subject to availability of funds. The Petitioner however needs to
submit progress report in this regard to the Authority on quarterly basis. Any variation on
the basis of actual investment will be adjusted under the relevant head in the subsequent
years.
29.

Issue#12 Whether the petitioner's request for adjustment of T&T losses with an impact of
Rs.2,332.39 million for FY 2012-13 is justified?

29.1 NEPRA in its determination of April 14, 2004 assessed 2.5% Transmission and
Transformation (T&T) losses for 500kv and 220kV systems of NTDC. The same
benchmark for T&T losses @ 2.5% was maintained by NEPRA in its determination of
January 6, 2006 and determination of May 9, 2011. Further, the Authority in its
determination of July 19, 2013 revised the benchmark for T&T losses from 2.5% to 3%
with the direction to conduct independent study of T&T losses. Accordingly, NTDC
appointed M/s Power Planner International (PPI) as consultant for independent
evaluation of T&T losses. The consultant has shared the draft report with GM Planning
(Power) NTDC which is likely to be finalized by the mid of October, 2014. The same will
be submitted to NEPRA on its finalization accordingly. NEPRA determined the tariff for
FY 2012-13 on July 19, 2013 and notified the same in September 24, 2013. In the said
determination, the benchmark of T&T losses were revised from 2.5% to 3%. Due to
delayed notification the petitioner could not incorporate the revised benchmark in the
relevant year i.e FY 2012-13 hence the petitioner has the legitimate right to recover the
same as uncovered cost in the current tariff petition. The impact is calculated as under:
Impact of T&T Losses
(Rs. in Million)

Month

Cost Beyond 2.5%

Cost Beyond 3%

Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Total

785.99
972.83
506.78
609.09
386.60
343.54
654.85
376.72
91.43
4,727.83

452.56
667.15
238.12
337.80
142.97
62.24
337.27
157.35
2,395.45

Difference of
Unrecovered Cost
333.43
305.68
268.66
271.29
243.63
281.30
317.58
219.38
91.43
2,332.39..
32

Determination of the Authority in the matter of NTDC

No. NEPRA/TRF-277/NTDC-2014

29.2 The claim of the Petitioner was scrutinized and checked in detail from monthly
submissions by the CPPA and the amount of T&T losses due to increase of cap from 2.5%
to 3% worked out as Rs. 2,320 million. The above table also exhibits that NTDC has
legitimate right to claim as uncovered cost for FY 2012-13. Though it would not cast a
direct impact on the tariff but an adjustment will be made in the future billing to DISCOs
& K-Electric and trade receivables of NTDC will be adjusted by Rs. 2,320 million
accordingly.
29.3 Having gone through the submission of the Petitioner's claim against T&T losses, the
Authority considers that NTDC's claim is established since the revenue requirement for
the NTDC was determined for the period i.e. 1st July 2012 to 30th June 2013. The T&T
losses were allowed maximum upto 3% therefore the verified amount being in line with
the determination of the Authority is approved. However, the adjustment on this account
should be made by NTDC in the future invoices of CPPA to all DISCOs including KElectric.
30.

Issue#13 Whether the petitioner's request for adjustment of T&T losses from FY 2009-14
with an impact of Rs. 14,671 million is justified?

30.1 The Petitioner submitted that benchmark set by NEPRA is on yearly basis but
unfortunately NEPRA is gauging NTDC losses on monthly basis which is based on yearly
benchmark thus by ignoring the numerous factors as explained above which having been
causing huge financial loss to the Company. The losses already gauged by NEPRA may be
adjusted accordingly. It is therefore proposed that:
NEPRA may allow us T& T losses by considering the uncontrollable factors like
seasonal impact, generation mix, system constraints and distance of load centre to
supply point to end-users and Government priority to supply electricity major urban
areas, etc. to safeguard the petitioner from huge financial loss.
T&T losses which allowed @ 2.5% -3.0% from FY 2009-10 to FY 2013-14 was actually
yearly benchmark and the same has been applied by NEPRA to gauge the monthly
T&T losses. Resultantly NTDCL is not able to recover its cost of service fully and
return on equity (ROE) also affected adversely. It is therefore suggested that
adjustment on yearly based benchmark for T&T losses may please be determined at
the end of financial year instead of monthly basis. The losses amounting to Rs.
14,671/- Mln from FY 2009-10 to FY 2013-14 which have already been disallowed
may be adjusted/ actualized on the basis of respective yearly benchmark.
The total T&T losses sustained by the Company are tabulated below:
Rs. Mln

2009-10 1 2010-11 I 2011-12 I 2012-13 2013-14 Total

Description
Actual
Provisional
Transmission losses 3,571 2,916 2,331 4,728 1,125 14,671
% age of Losses
3.40% 3.00% 2.80% 3.01% 2.43%
-

33

Determination of the Authority in the matter of NTDC

No. NEPRA/TRF-277/N7'DC-2014

30.2 In order to assess the T&T losses of the NTDC, it was directed to provide the detailed
technical study. NEPRA based on the recommendations of the technical division in the
determination dated 19th July 2013 allowed T&T losses up to 3%. Being quasi judicial
body NEPRA rely upon the documentary evidence for substantiation of the claim
requested. The fuel price adjustment is made on monthly basis and accordingly the 3%
upper cape was allowed. NTDC was directed to provide the detail reasoning for huge
variation in the T&T losses however NTDC was unable to provide justification in this
regard. Furthermore, the increase in T&T losses is not justified with the huge investment
allowed to the Petitioner. In the instant case no justification / rationale / basis are
submitted which require review with respect to the monthly T&T losses adjustment. As
regards the arrears with respect to T&T losses., the stance of the NTDC is not correct since
the T&T losses period was from 1st July 2012 to 30th June 2013 the adjustment of which is
already allowed. Despite several directions issued to NTDC in the determinations of the
Authority, NTDC was unable to submit the technical study with respect to T&T losses. In
the absence of T&T study, the Authority refuses to entertain the NTDC's request in this
regard. Therefore prior period cost of T&T losses requested by NTDC is not justified. As
regards the annual adjustment of T&T losses, the Authority considers that the Petitioner
stance with respect to seasonal variation in T&T losses is correct. The Authority allowed
3% maximum cap in the previous determination for the FY 2012-13. Since the T&T loss
varies on monthly basis therefore the Authority approves it to be adjusted on yearly basis.
31.

Issue#14 Whether the Annual Development Program for Rs. 811 million for FY 2014-15
is justified with its cost/benefits?

31.1 The Petitioner submitted that it requires to procure 500/220kV equipments for
operational needs of material / equipments for smooth functioning of transmission
network of NTDC. In addition to this, vehicles are important means to transact the
business, keeping in view the scarcity and conditions of present vehicle fleet of NTDC it is
imperative to add new vehicles. Computers are also necessary gadgets to fulfill daily work
needs; in this regard the Petitioner intends to purchase computers to meet the needs of
formations. The Petitioner, being a sole transmission company operating throughout the
country may face problems in system during the year so that a provision of contingencies
made under emergent work/ sabotage activities. In order to meet with the requirements of
residential and office building needs GSO regions of the Petitioner are engaged in civil
work. A provision for security needs is also included to safeguard Petitioner's vital assets
such as warehouses, NPCC and vulnerable grids located in KPK and Baluchistan. The
following details has been provided by the Petitioner:

34

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/N7'DC-2014

Description
Procurement of
Material/Equipment for GSO
Regions to be procured for F.Y
2014-15
Vehicles for Opertions Purpose
Computers and Accesories
Emergent Work (Contigencies)

Total - A
Civil Works for GSO regions
Civil Work/ Procurement of
Security Equipment

Total - B
Total: (A+ B)

Lahore

___. _ .._....,...
GSO Regions
Oth er
Total
Islamabad Hyderabad Multan Formation

55.30

35.20

18.18

33.05

141.73

145.74
2.14
-

11.47
2.03
-

36.53
1.41

7.16
2.27

1.38
37.17
100.00

202.28
45.02
100.00

203.18

48.70

56.12

42.48

138.55

489.03

50.00

39.00

36.00

28.00

42.50

195.50

3.50

2.40

7.08

24.83

89.14

126.94

53.50
256.68

41.40
90.10

43.08
99.20

52.83
95.31

131.64
270.19

322.44
811.48

31.2 NTDC role is very important keeping in view the transmission and transformation
services provided in the country. Capital expenditure is necessary part of the expansion
policy of Company for meeting the growing requirement of the organization. The capital
expenditure is not part of the project investment. Considering the request, the Authority
hereby allows Rs. 811.48 million for FY 2014-15.
32.

Issue#15 Whether the detail of investment program of ongoing and new project and cost
incurred on these projects claimed by the petitioner is justified? Whether the detailed
studies have been carried out to indentify new projects? Whether an (n-1) criterion has
been assured?

32.1

The Petitioner stated that the detailed studies have been carried out and n-1 criterion
has been assured, further it submitted that projects are justified. The Studies submitted by
the Petitioner for justification of new projects are based on standard acceptable criteria as
acknowledged by the technical division. The submission of the Petitioner is satisfactory in
this regard.

32.2 Having considered the submission of the Petitioner the Authority considers that the
Petitioner's response is satisfactory.
33.

Issue#16 What steps have been taken for undertaking Extra High Voltage (above 500kV
AC) or HVDC system induction in the existing network?

33.1 The Petitioner stated that at present it does not have any plan to go above 500 kV HVAC
system. However, it planned + 500kV HVDC for CASA 1000 project from Pak-Afghan
border to Peshawar (100 km). Further, the Petitioner has proposed + 600 kV HVDC
transmission lines for evacuation of power from Thar coal based generation, K4 K-2

Determination of the Authority in the matter of NTDC

No NEPRA/TRF-277/N7'DC-2014

Nuclear Power Plants and upcoming imported coal based power plants at coastal area of
Karachi. The + 600 kV HVDC transmission lines will be under taken in the private sector.
33.2 The Petitioner is responsible for transporting power from CASA and other imports
including 1000 MW from IRAN. The Petitioner has not shared any information regarding
500 kV HVDC Transmission Line for dispersal of 1000 MW power from Tanavir Iran. In
view thereof NTDC is hereby directed to submit the aforementioned information within
30 days of issuance of this determination.
34.

Issue#17 What steps have been taken for preventing the transmission system breakdowns
resulting in blackouts and tripping during the foggy weather?

34.1 The Petitioner submitted that Crash Maintenance work of Transmission Lines is in
Progress since September, 2014 for washing/cleaning/replacement of flash over/punctured
Disc Insulators to minimize the tripping.
GSO Region

T/Line

Islamabad

500 kV

Hyderabad

Lahore

Multan

Total

Washed

Cleaned

Replaced

1,932

55

100

220 kV

60

60

55

500 kV

122,530

28,094

258

220 kV

18,108

15,474

22

500 kV

750

146,764

220 kV

13,465

8,571

730

500 kV

74,920

220 kV

99,168

222

200,132

174,913

365

130,801

24,105

1,029

34.2 The Petitioner's response is not satisfactory and therefore not acceptable in view of the
number of tripping in different parts of the country, which resulted in breakdown of
transmission system. In view thereof the Authority hereby directs the Petitioner to carry
out detailed inquiry of the tripping and submit the detailed reports along with the plan to
cater for such incidents in future.
35.

Issue #18 Whether the qualification of the external auditor in financial statements for FY
2012-13 is justified?

35.1 NTDC submitted that the Company on advice of PEPCO has transferred loans amounting
Rs. 239.5 Blns to DISCOs out of which loan of Rs. 178.5 billion were not acknowledged
by DISCOs. As a result mark-up on such loans amounting to Rs. 5.6 Blns which has not
acknowledged by those DISCOs. We are unable to determine how this mark-up 11 be
36

Determination of the Authority in the matter of NTDC

No. IVEPRA/TRF-277/NTDC-2014

recovered and over which period the recovery will be made. Out of 178.5 billion in
Financial Year 2013-14 Rs. 55 Blns has been recognized by the respective DISCO, for
adjustment of balance loans NTDC is making efforts.
35.2 The Company advanced Rs. 2.3 billion (2012: Rs. 2.3 billion) to Japan Power Generation
Limited (JPGL) for purchase of power, whereas JPGL has acknowledged Rs. 1 billion only.
In respect of this, we have noted that the Company has long outstanding disputes with
JPGL and matter has also been referred to International Court of Arbitration and the
management has also been negotiating with JPGL for recovery of advance and certain
other unaccounted for claims. We have further noted from the latest available audited
financial statements of JPGL that its financial position is adverse whereby their equity has
been eroded and its total liabilities have exceeded its total assets. Despite the forgoing
facts, no provision has been made in these financial statements against such advance.
There is dispute between JPGL and WAPDA under the provisions of PPA. The Final
reward has been received in current Financial year, as per reward Rs 720 million is
receivable from JPGL, however both JPGL and the Power Purchaser has reservations on
its implementation. The implementation is under consideration at Board Level.
35.3 National Electric Power Regulatory Authority (NEPRA) notified revised tariff for the
Company relating to financial year 2012-13 through notification no. NEPRA/TRF226/NTDC-2013/8916-8918 dated 19 July 2013. Under the revised tariff, the rates for the
use of system charges has been increased while the limit for transmission losses has also
been increased. In this regards, the Company has not incorporated the financial impact of
aforesaid revised tariff in the financial statements for the year ended 30 June 2013. Owing
to non-availibity of certain reports, the financial impact of the aforesaid adjustment could
not be ascertained. Sales are higher by Rs. 3.2 Blns and operating expenses are suppresed
by Rs. 2.3 Blns and Profit after tax was higher Rs. 2.3 billion. NTDCL requested tariff
revision for FY 2012-13 to NEPRA, and GoP notified the tariff at the end of Ist Quarter
of FY 2013-14, hence NTDCL remained unable to avail the benefit of the revised tariff
retrospectively. However, NTDCL claimed the uncovered cost for FY 2012-13 & 2013-14
in the tariff petition for FY 2014-15.
35.4 Securities and Exchange Commission of Pakistan vide S.R.O. No. 24 of 2012 had granted
waiver to the Company, with immediate effect, from the application of (IFRIC-4)
"Determining whether an arrangement contains a lease" subject to certain disclosure
requirements. However, no such disclosure has been made in the financial statements.
Currently NTDC is dealing with number of IPPs which make this exercise very
complicated, secondly NTDC is not listed, hence this office has requested the SECP for
exemption from this disclosure (additional information) in annual accounts.
35.5 The Company issued 5,269,988,100 ordinary shares of Rs 10/- each in the name of
President of Pakistan against cash and other considerations amounting to Rs. 22 billion
and Rs. 30 billion respectively. However, the requirements of "The Companies Issue of
Capital Rules 1996" have not been complied with in respect of issuance of shares for
consideration other than in cash, as shares have been issued against such properties which
have not been valued by professional valuers and whose title are still not in the name of

Determination of the Authority in the matter of NTDC

No. 1VEPRA/TRF-277/N7'DC-2014

the Company. Further, the exemption order from the Securities and Exchange
Commission of Pakistan with respect to the requirements of "The Companies Issue of
Capital Rules 1996" had not been made available to us. It is apprised that Water & Power
Development Authority (WAPDA) has taken up the matter with Ministry of Water &
Power vide letter No. MF(HQ)/P/GMF(P) 1672-76 dated 24-4-2012 with the request to
confirm the accounting treatment to be made in the books of accounts of Wapda for
issuance of ordinary shares to the President of Pakistan. The proposed accounting
treatment would be made in the Books of Account of Wapda Power Wing on receipt of
requisite confirmation from Ministry of Water & Power. Furthermore, the matter was
also taken up with SECP to get confirmation for the compliance of the Rules and response
is awaited from their end.
35.6 The NTDC's response on the matter has been critically evaluated in light of the audited
and draft accounts for the FY 2012-13 and FY 2013-14. Tariff Department considers that
NTDC's financial viability is important for NEPRA since the Company is licensee of
NEPRA and only Transmission Company providing services to all Distribution
Companies including K-Electric. The current circular debt situation is alarming because
the end-consumer is affected due to the recovery of the revenue requirement issues. The
qualifications of the auditors require NTDC management attention since this is directly
related with the financial viability of the Company. Although GOP is the owner of the
NTDC however keeping in view the legal status of the Company, NEPRA considers that
the receivables should be recovered in a manner that do not affect the Company's
financial viability. In view thereof NTDC management is directed to raise these issues
with the quarter concerned i.e. Ministry of Water & Power and pursue with respect to
the recovery of the receivables on priority basis.
36.

Issue # 19 Whether the concerns of the intervener and commentator are justified?

36.1 The NTDC did not submit any response of the intervener's comments. The Authority
takes serious notice of the non-reply of the petitioner against the concerns raised by the
intervener and directs that the petitioner should have responded and in future such act of
the petitioner would invite penal action under the relevant rules. However the Authority
has considered and addressed the same as under:

Central Power Purchasing Agency (CPPA) was created / established under the
provisions of Article 8 of NTDC license (No. TL/01/2002) and clause 62 & 63 of
NEPRA Tariff determination for NTDC 2004 on 26 Jul 2004 with a mandate to
procure Electric Power on behalf of XWDISCOs to meet their demand.

NTDC is transmission company and have only given mandate to provide

transmission and transformation services. NEPRA ensures that the Petitioner
complies its Performance Standards (Transmission) Rules 2005 and Grid Code
accordingly.

On the concern of paying Rs. 21.8 billion to the RPPs in mobilization advance
with bank loans taken against assets of the National Transmission and Dispatch
Company (NTDC), the intervener could not substantiate its concern wi any
38

Determination of the Authority in the matter of NTDC

No. NEPRA/7'RF-277/NTDC-2014

evidence. It is pertinent to mention here that there was no such transaction

recorded in the books of the accounts either or qualified by the external auditor in
their report of FY 2012-13, therefore the Authority is recommended to decline
the concern of the intervener.

On the point of NTDC's receivables of Rs. 31 billion from K-ELECTRIC till 2008,
the matter has been discussed in detail at Para # 25.4 above.

Same as discussed at Para # 25.4 above.

36.2 Based on the assessment in the preceding paragraphs, the revenue requirement for FY
2014-15 is estimated as follows:
Revenue Requirement

GE&A (including CPPA)

Repair & Maintenance
Insurance
Depreciation
Financial Charges
Return on Equity
Prior Year Adjustment (PYA) for FY 2012-13
Less: Other Income
Total Revenue Requirement

Rs. Million
4,937
730
119
4,327
848
9,375
3,610
23,946
(1,320)
22,626

37. ORDER
37.1 The National Transmission and Dispatch Company (NTDC) is allowed to charge such
tariff and on such terms and conditions as provided hereunder:
Use of System Charges
NTDC shall charge its users for provision of transmission and allied services the
following two-part tariff i.e. a fixed and variable charge:
Fixed charge (USCF)
Variable charge (USCV)

Its. 113.05/kW/month
Rs. 0.2263 per kWh X LAL factor.

Where:
LAL Factor is a factor for Adjustment of Losses and Load imposed on the
transmission system by user. LAL Factor of unity will be applied till benchmarks
are defined by NEP
39

Determination of the Authority in the matter of NTDC

No. IVEPRA/TRF-277/N7'DC-2014

The variable charge shall be applicable to the energy in kilowatt-hours (kWh)

recorded during a billing period. Recording of the maximum demand in kW and
energy delivered in kWh shall be carried out at meters installed at the delivery
metering points i.e. inter-connection point between:
a) NTDC transmission system (NTDC System) and the bulk power consumer.
(b) NTDC system and the transmission system of a special purpose transmission
licensee.
(c) NTDC system and the transmission system of another country connected
under an arrangement approved by the Federal Government.
(d) NTDC system and a distribution company receiving power in bulk either for
sale to its own consumers or on behalf of another distribution company or a
BPC located in another distribution company.
37.2

Transfer Price or Transfer Charge to XWDISCOS

37.2.1 NTDC shall charge the DISCOS, a transfer charge for procuring power from approved
generating companies and its delivery to DISCOs for a billing period as under:
TP

= CTP + UOSC + ETC

Where:

TP

= Transfer Price to DISCOs/K-ELECTRIC

CTP

= Capacity Transfer Price to DISCOs/K-ELECTRIC in

Rs./kW/Month

UOSC

= Use of System Charge to DISCOs/ K-ELECTRIC in Rs./kW/

Month

ETP

= Energy Transfer Price to DISCOs/K-ELECTRIC in Rs./kWh

GenC
PD(sys)

CTC
UOSC

USCF
PD(sys)

Where:

GenC

= Summation of the Capacity Cost pertaining to generation in

Rupees for a billing period minus the amount of liquidated
damages received during that billing period.

USCF

= NTDC transmission charge in Rupees for a billing

40

Determination of the Authority in the matter of NTDC

No. 1VEPRA/IRF-277/NTDC-2014

PD(sys) = Peak Demand of the System recorded during a billing period in

kW.
Note : To calculate the CTC and UOSC in Rupees for each DISCOS/ KELECTRIC for a billing period, the rate of CTC and UOSC will be further
multiplied by the particular DISCO/ K-ELECTRIC's demand recorded at the
time of system peak in kW.
ETC

GenE
EUs

Where:
GenE
EUs

Total Energy charge in Rupees during a billing period.

Energy units (kWh) recorded at the Common Delivery
Metering Points of all the DISCOs/K-ELECTRIC during a
billing period.

37.2.2 NTDC shall, for the purpose of clarity intimate to all DISCOs/K-ELECTRIC the
generation part of the Transfer Charge during a billing period by deducting from the
Transfer Charge the Transmission Charge or Use of System Charges.
37.2.3 The following generation entities and extraneous sources of import of electricity
stand approved who would be providing electric power to CPPA within NTDC for
onward delivery to the DISCOs/K-ELECTRIC:
i)

All Hydroelectric Generating Stations owned and operated by WAPDA.

(ii)

Chashma Nuclear Power Generating Station.

(iii)

All IPPs selling power to WAPDA under a long-term contract for which
sovereign guarantees have been provided by the Federal Government.

(iv)

The thermal generation companies formed out of unbundling of WAPDA for a

period upto 01.07.2009 or till the Competitive Market Operation Date determined
by the Authority (whichever is later).

(v)

Other generation entities (in the public sector, private sector or under publicprivate partnership, initiated, sponsored or developed by the Federal Government
or any Provincial Government) approved by NEPRA to provide power to NTDC
for onward delivery to the DISCOs/K-ELECTRIC for a specific period.

vi)

Sources of electricity imported from another country or the territory of Azad

Jammu and Kashmir un er an approval of the Federal Government for provision
of power to meet the demand of any or all of the DISCOs/K-ELECTRIC as
approved by NEPRA.

41

Determination of the Authority in the matter of NTDC

No. NEPRA/TRF-277/NTDC-2014

(vii) Electricity purchased by NTDC from any generation company within Pakistan
through Power Purchase Agreement pursuant to NEPRA Interim Power
Procurement Regulations, 2005.

38

Terms and Conditions:

38.1

Definitions:
1.Bulk Power Consumer (BPC) means a Bulk Power Consumer as defined in NEPRA Act.
2. Billing Period means a period determined by NEPRA for the purpose of charging the
transfer charge to DISCOs in respect of power delivered. The billing period for the
purpose of applying a transfer charge shall be on a one month basis (starting 24:00 hrs of
the 1st day of the month and ending 12:00 hrs on the last day of the month) till a
shorter billing period is specified by NEPRA through a Competitive Trading
Arrangement Transitional Order.
3. Competitive Market Operation Date = The date as defined under article 7(2) of the
License granted to NTDC.
4. CPPA = Central Power Purchase Agency as required under Article 8(a) of the License
granted to NTDC.
5. Delivery metering point means the interconnection point at the grid stations where
power is delivered by NTDC to DISCOs, BPCs connected directly to the transmission
system or other users of the transmission system and where relevant meters are installed
to measure such power delivered.
6. IPPs = Independent Power Producers established under the Federal Government's
Power Policy of 1994 or earlier (listed as Annexure-III).
7. System Peak Demand = The highest system peak demand recorded during a billing
period measured over successive periods of 30 minute interval at the receiving metering
point of the DISCOs or user of the transmission system. Maximum demand measuring
apparatus used for recording the maximum system peak demand during a billing period
shall be based on a 30 minutes interval reset basis.
8. Month means a calendar month according to the Gregorian Calendar.
9. Power Factor: the rate expressed as a percentage of the kilowatt hours to the kilovolt
hours consumed during a billing period.
10. Use of System Charge means any charge (fixed or variable) payable by a Distribution
Company, BPC or any other user of the transmission system for Transportation of
Power from Generator to Delivery Metering Point and delivery to a distribution
company, PC or any other user and as required under Article 13 and 14 of the NTDC
License.

42

Determination of the Authority in the matter of NTDC

No. NEPRA/TRF-277/NTDC-2014

39.

Other Terms and Conditions

Power Factor Penalty: The DISCOs shall maintain an average power factor during a
billing period at the delivery metering point of at least 85% lagging. In the event of
the said Power Factor falling below 85% in a billing period the concerned DISCO
shall pay to NTDC a penalty as determined by the Authority for general applicability
on the recommendation of NTDC and after consultation with the generation and
distribution licensees.
In order to ensure least cost generation, NTDC shall strictly follow the merit order
while operating the power plants.

40.

Directions of the Authority

40.1 The directions of the Authority in the proceedings of the instant petition have been
reproduced as under: To develop the mechanism in consultation with the K-Electric for supply of electricity in
co-ordination with Ministry of Water & Power and submit the report for Authority's
consideration.
To take necessary measures for improving recovery situation and take up this issue with
the GOP in order to resolve the matter.
To evacuate renewable energy on priority basis from the power projects which are
achieving COD in coming months in line with the Power Policy of the GOP.
To submit the status of NOC issued to renewable projects within one month of issuance of
this determination
To provide the detailed power evacuation plan for the upcoming renewable power
projects within one month of issuance of this determination.
To provide copy of agreement with K-Electric when it is finalized.
To take necessary measures for improving recovery situation and take up this issue with
the GOP in order to resolve the matter.
To
file the next tariff petition of FY 2015-16 on the basis of calculation of MDI on co
incidental basis.
To submit report regarding 500 kV HVDC Transmission Line for dispersal of 1000 MW
power from Tanavir Iran within one month of issuance of this determination.
To carry out detailed inquiry of the tripping nd submit the detailed reports along with
the plan to cater for such incidents in future.

43

National Transmission and Despatch Company

Calculation of Capital Base and Reasonable Return

Annex-I

Description

Determined
2012-13

A Fixed Assets
a) Original Cost of Fixed Assets in Opertaions

Projected
2014-15

(Rs.M1n)
Assessed
2014-15

109,470

118,210

143,933

118,210

(55)
(47,970)

(55)
(47,741)

(5,219)
(52,031)

(49)
(56,358)

(5,219)
(52,031)

51,291

56,850

59,735

85,261

59,735

131,618
131,618

118,525
118,525

120,695
120,695

172,787
172,787

120,695
120,695

a) Stores & Spares (3% of the gross fixed assets in operation)

3,851

3,284

3,546

4,318

3,546

Accounts Receiveables (equal to 30 no. of days outstanding of annual

b) billing)

1,737

1,379

1,630

3,014

1,630

1,436
7,024
138,642

1,436
6,100
124,624

1,593
6,770
127,465

215
7,547
180,334

1,593
6,770
127,465

48,021
1,424

37,604

35,179

45,428

35,179

62
7,691

15,609

16,263

10,702

16,263

4,683
67,187
71,455
13.11%
9,368

4,066
57,279
67,345
13.11%
8,829

4,513
55,955
71,510
13.11%
9,375

5,031
61,161
119,173
13.11%
15,624

4,513
55,955
71,510
13.11%
9,375

Net Operating Fixed Assets

Total A
Current Assets

c)
C
D

Provisional
2013-14

128,352

Less: Consumers' Capital Contribution

Accumulated Depreciation
Assets writen/ Disposed off
b) Capital Work in Prgress

Actual
2012-13

Cash & Bank Balance (1/12th of sum of cash and bank balance whether
deposits at the end of each month of the year subject to the maximum of
1/6th of annual operating expenses other than non-cash items)
Total B
Total A+B

Less:
b) Foreign Loan - Direct
c) Foreign Loan - Relent
d) Federal Government Loan
e)

Borrowing from Government's approved Organizations/ institutions

5,307

f)

Relent loan from GOP

Local Loans
g) Security Deposits by the consumers
h) Employees Retirement Benefits
i) Dividends payable at the beginning of accounting year

w) Creditors, accrued and other current liabilities (2/3rd of current assets)

Total D
E
Capital Base (C-D)
F
Reasonable return on Capital Base %
Reasonable return on Capital Base (E*F)

-4-

National Transmission and Despatch Company

ESTIMATION OF TRANSMISSION COSTS

Annex-II
RA OVUM

Description

Transmission Costs:a General Establishment and Admin (Include CPPA)

b Repair & Maintenance
c Insurance
d Depreciation
Total Transmission Costs
Financial Charges
a Foreign Direct Loan
b Foreign Relent Loan
c Central Govt. Loan
d Wapda Bonds
e Local Currency Loan
f Others
Total Financial Charges
Allocated to Work in Progress
Net Financial Charges

4
5

Total Costs (1+2)

Other Income
Net Costs (3-4)

-I-

Determined

Actual

Provisional

Assessed

2012-13

2012-13

2013-14

2014-15

4,825
595
112
4,083
9,615
5,902
237
726
6,866
(3,137)
3,729
13,343
(1,536)
11,807

4,830
456
92
3,428
8,806

5,651
571
108
4,029
10,359

4,937
730
119
4,327
10,113
-

3,755
546
-

4,885
385

4,885
385

5,270

5,270

(4,422)
848
11,207
(949)
10,258

(4,422)
848
10,961
(1,320)
9,641

4
4,305
(3,556)
749
9,555
(1,040)
8,515

Annex-III

List of independent Power Producers (IPPs)

1. AES Lal Pir (Pvt.) Ltd
2. AES PakGen (Pvt.) Limited
3. Altern Energy Limited
4. Davis Energen private Limited
5. Fauji Kabirwala Power Company Limited
6. Gul Ahmed Energy Limited
7. Habibullah Coastal Power (Pvt.) Co.
8. Japan Power Limited
9. Kohinoor Energy Limited
10. TNB Liberty Power Ltd
11. Rousch (Pakistan) Power Limited
12. Saba Power Company Limited
13. Southern Electric Power Company Limited
14. Tapal Energy Private Limited
15. Uch Power Limited

46