BEFORE THE GUJARAT ELECTRICITY REGULATORY COMMISSION GANDHINAGAR

BEFORE THE GUJARAT ELECTRICITY REGULATORY COMMISSION GANDHINAGAR CASE NO. Filing of Petition for True Up of & Determination of Tariff for FY 2018-19 Under GERC MYT Regulations 2016 and Section 62 of the Electricity Act, 2003. Filed by:- Gujarat Energy Transmission Corporation Limited Regd. Office: Vidyut Bhavan, Race Course Circle, Vadodara 390 007

BEFORE THE GUJARAT ELECTRICITY REGULATORY COMMISSION GANDHINAGAR Filing No: Case No: IN THE MATTER OF AND Filing of Petition for True Up of and Determination of Tariff for FY 2018-19 for GETCO under GERC MYT Regulations 2016 and Section 62 of the Electricity Act, 2003. IN THE MATTER OF Gujarat Energy Transmission Corporation Limited, Sardar Patel Vidyut Bhavan, Race Course, Vadodara 390007 PETITIONER THE PETITIONER ABOVE NAMED RESPECTFULLY SUBMITS Gujarat Energy Transmission Corporation Limited Page 2

TABLE OF CONTENTS SECTION 1. INTRODUCTION... 6 1.1. PREAMBLE... 6 1.2. INTRODUCTION... 6 1.3. MULTI-YEAR TARIFF REGULATIONS:... 7 SECTION 2. EXECUTIVE SUMMARY... 8 2.1. PREAMBLE... 8 2.2. TRUE UP FOR... 8 2.3. NET RECOVERY... 9 2.4. TRANSMISSION TARIFF FOR FY 2018-19... 10 SECTION 3. TRUE UP OF... 12 3.1. PREAMBLE... 12 3.2. PRINCIPLES FOR TRUE UP FOR... 12 3.3. EXISTING CAPACITY OF GETCO IN... 12 3.4. CAPITAL EXPENDITURE FOR... 13 3.5. FUNDING OF CAPEX... 14 3.6. ADDITION TO TRANSMISSION LINES AND SUBSTATIONS... 14 3.7. AVAILABILITY OF TRANSMISSION SYSTEM... 14 3.8. TRANSMISSION LOSSES... 14 3.9. NETWORK OUTAGES & FAULTS... 14 3.10. LOADING OF TRANSMISSION SYSTEM... 15 3.11. ANNUAL FIXED COST FOR... 16 3.12. CATEGORIZATION OF HEADS OF EXPENSES... 17 3.13. OPERATION & MAINTENANCE EXPENDITURE FOR... 17 3.14. DEPRECIATION FOR... 19 3.15. INTEREST & FINANCE CHARGES FOR... 19 3.16. RETURN ON EQUITY FOR... 20 3.17. INTEREST ON WORKING CAPITAL FOR... 21 3.18. INCOME TAX FOR... 21 3.19. CONTRIBUTION TO CONTINGENCY RESERVE FOR... 21 3.20. INCENTIVE ON TRANSMISSION AVAILABILITY... 22 3.21. REVENUE FROM OTHER INCOME... 22 3.22. AGGREGATE REVENUE REQUIREMENT FOR... 23 3.23. SHARING OF GAINS & LOSSES... 23 3.24. REVENUE GAP FOR... 25 3.25. DETERMINATION OF TRANSMISSION TARIFF FOR FY 2018-19... 26 3.26. REACTIVE ENERGY CHARGES FOR SOLAR ENERGY PROJECTS... 29 SECTION 4. COMPLIANCE OF DIRECTIVES... 31 4.1. PREAMBLE... 31 4.2. COMPLIANCE OF DIRECTIVES... 31 SECTION 5. PRAYER... 42 ANNEXURE A: REPORT ON TRANSMISSION PLANNING TO AVOID TRANSMISSION CONSTRAINTS IN GETCO SYSTEM... 44 ANNEXURE B: 2ND QUARTER (FY 2017-18) REPORT ON LOADING OF SUBSTATION. 51 TARIFF FILING FORMATS... 64 Gujarat Energy Transmission Corporation Limited Page 3

LIST OF TABLES Table 1 : True up for... 8 Table 2 : Summary of Controllable & Uncontrollable factors... 9 Table 3 : Net Recovery for... 10 Table 4: ARR for FY 2018-19... 10 Table 5 : Transmission tariff for FY 2018-19... 11 Table 6 : Existing Capacity of GETCO in... 13 Table 7 : Capital expenditure during... 13 Table 8 : Funding of CAPEX... 14 Table 9 : Network addition of GETCO during... 14 Table 10 : Transmission losses of GETCO for... 14 Table 11 : Network outages & faults for GETCO for... 15 Table 12 : Summary of loading of transmission system for... 16 Table 13 : Transmission lines & No. of bays for... 18 Table 14 : O&M cost (Normative / Actuals) for... 18 Table 15 : Net O&M cost (As per audited accounts) for... 18 Table 16 : Gains/ (losses) from O&M expenses... 19 Table 17 : Depreciation for... 19 Table 18 : Gain/ (losses) from Depreciation... 19 Table 19 : Interest & Finance charges for... 20 Table 20 : Gains/ (losses) from Interest & finance charges... 20 Table 21 : Return on Equity for... 20 Table 22 : Gains/ (losses) from Return on Equity... 20 Table 23 : Interest on working capital for... 21 Table 24 : Gains/ (losses) on Interest on working capital... 21 Table 25 : Gains/ (losses) on Income Tax... 21 Table 26 : Gains/ (losses) from Contingency Reserves... 22 Table 27 : Incentive for higher availability... 22 Table 28 : Gains/ (losses) on Incentive... 22 Table 29 : Revenue from other income... 22 Table 30 : Other income for... 23 Table 31 : Aggregate revenue requirement for... 23 Table 32 : Net gains/ (losses) for... 25 Table 33 : Revenue gap for... 26 Table 34: ARR for FY 2018-19... 26 Table 35: Projected loading in MW for FY 2018-19... 27 Table 36 : Transmission tariff for FY 2018-19... 28 Gujarat Energy Transmission Corporation Limited Page 4

ABBREVIATIONS 1. A&G Administrative & General 2. AC Alternate Current 3. ARR Aggregate Revenue Requirement 4. CAPEX Capital Expenditure 5. Ckt. km Circuit Kilometer 6. FY Financial Year 7. GEB Gujarat Electricity Board 8. GERC Gujarat Electricity Regulatory Commission 9. GETCO Gujarat Energy Transmission Corporation Limited 10. GoG Government of Gujarat 11. GSECL Gujarat State Electricity Corporation Limited 12. GUVNL Gujarat Urja Vikas Nigam Limited 13. HVDC High Voltage Direct Current 14. KV Kilo Volt 15. MVA Mega Volt Ampere 16. MW Mega Watt 17. MYT Multi Year Tariff 18. O&M Operation & Maintenance 19. R&M Renovation & Modernization 20. S/s Sub Station Gujarat Energy Transmission Corporation Limited Page 5

SECTION 1. INTRODUCTION 1.1. PREAMBLE 1.1.1. This section presents the background and reasons for filing of this Petition. 1.2. INTRODUCTION 1.2.1. The Government of Gujarat (hereinafter referred to as GoG ) notified the Gujarat Electricity Industry (Reorganization and Regulation) Act 2003 (hereinafter called as Act ) in May 2003 for the reorganization of the entire power sector in the State of Gujarat. 1.2.2. Pursuant to the above, erstwhile GEB was divided into seven different entities where in all its transmission related assets were transferred to the newly created entity Gujarat Energy Transmission Corporation Ltd (hereinafter referred as GETCO ). 1.2.3. As per Government of Gujarat s notification no GHU-2004-31-GEB-1104-2946-K, GETCO has been notified as the State Transmission Utility with effect from 1 st June 2004. 1.2.4. The Gujarat Electricity Regulatory Commission (hereinafter referred to as GERC or the Commission ), is an independent statutory body constituted under the provisions of the Electricity Regulatory Commissions (ERC) Act, 1998 and is currently under purview of the Electricity Act, 2003. GERC is vested with the authority of regulating the power sector in the State inter alia including determination of Tariff for electricity consumers. 1.2.5. Hon ble Commission notified the Gujarat Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2011 ( GERC MYT Regulations, 2011 ). Based on the petition filed by GETCO, the Hon ble Commission issued MYT order on 31 st March, 2011 for determining the ARR for the Second Control Period i.e. FY 2011-12 to FY 2015-16 in line with provisions outlined in the GERC (MYT) Regulations, 2011. Further, the Hon ble Commission issued order for mid-term review of Business plan dated 29 th April, 2014 for modification of the ARR for the remaining year of the control period for GETCO i.e. for FY 2014-15 to FY 2015-16. 1.2.6. GERC order dated 02 nd December, 2015 on the Suo-Motu Petition No. 1534/2015 states the following: We decide that the approved ARR of FY 2015-16 of the licensees / generating companies concerned be considered as provisional ARR of the licensees / generating companies for. We also decide that the licensees / generating companies shall file the ARR for FY 2016-17 based on the MYT Regulations for to FY 2020-21 and the true up for the same shall also be governed as per the new MYT Regulations. 1.2.7. Hon ble Commission notified the Gujarat Electricity Regulatory Commission (Multi- Year Tariff) Regulations, 2016 ( GERC MYT Regulations, 2016 ) on 29 th March 2016 and shall be applicable for determination of tariff in all cases covered under the Gujarat Energy Transmission Corporation Limited Page 6

regulations from 1 st April, 2016 onwards. Based on these Regulations, the Commission issued the Multi-Year Tariff Order dated 31 st March, 2017 in Petition No. 1620 of 2016 wherein Truing up of ARR for FY 2015-16 and determination of final ARR of and approval of Multi-Year ARR for the Third Control Period to FY 2020-21 was carried out. 1.3. MULTI-YEAR TARIFF REGULATIONS: 1.3.1. The key provisions of the Multi-Year Tariff Regulations, 2016 is reproduced below: 1.3.2. Section 3.1 of the GERC MYT Regulations, 2016: 3.1: The Commission shall determine tariff within the Multi-Year Tariff framework, for all matters for which the Commission has jurisdiction under the Act, including in the following cases: i. Supply of electricity by a Generating Company to a Distribution Licensee.. ii. Intra-State transmission of electricity; iii. SLDC Fees and Charges; iv. Intra-State Wheeling of electricity; v. Retail supply of electricity 1.3.3. Section 17 of the GERC MYT Regulations, 2016: 17.2 The filing for the Control Period under these Regulations shall be as under: b) From the second year of the Control Period and onwards, the Petition shall comprise of: i. Truing Up for and onwards to be carried out under Gujarat Electricity Regulatory Commission (Multi-Year Tariff) Regulations, 2016; ii. Revenue from the sale of power at existing tariffs and charges for the ensuing year (viz. FY 2018-19); iii. Revenue gap or revenue surplus for the ensuing year (viz. FY 2018-19) calculated based on Aggregate Revenue Requirement approved in the MYT Order and truing up for the previous year; iv. Application for determination of tariff for the ensuing year (viz. FY 2018-19). 1.3.4. Under section 62 of the Electricity Act, 2003 and GERC MYT Regulations, 2016, GETCO is filing its Petition for True Up for and Determination of Tariff for FY 2018-19 to the Hon ble Commission for approval. Gujarat Energy Transmission Corporation Limited Page 7

SECTION 2. EXECUTIVE SUMMARY 2.1. PREAMBLE 2.1.1. This section highlights the summary of Petition for True Up for and Determination of Tariff for FY 2018-19. 2.2. TRUE UP FOR 2.2.1. GETCO has worked out its Aggregate Revenue Requirement (ARR) for as a part of the True Up for. GETCO has presented the actual cost components based on audited annual accounts for. 2.2.2. The detailed comparison of various cost components with the values approved by Sr. No. the Hon ble Commission has been presented in Chapter of True up of. A summary of the proposed ARR for Truing-up of compared with the approved Final ARR for in Multi-Year Tariff Order dated 31 st March, 2017 is presented in the table given below. Table 1 : True up for Particulars (Approved) (Normative/A ctual) Rs. Crores Deviation 1 Operation & Maintenance Expenses 1,275.38 1,289.42 (14.04) 2 Depreciation 928.61 949.49 (20.88) 3 Interest & Finance Charges 557.14 484.23 72.91 4 Interest on Working Capital 63.35 63.42 (0.07) 5 Return on Equity 694.04 697.68 (3.64) 6 Contingency Reserve - - - 7 Total Fixed Costs 3,518.52 3,484.25 34.27 7 Less: Expenses Capitalised 194.13 209.75 (15.62) 8 Add: Income Tax 64.62 39.74 24.88 9 Total Transmission Charges 3,389.01 3,314.24 74.77 10 Less: Other Income 331.37 312.52 18.85 11 Aggregate Revenue Requirement 3,057.64 3,001.72 55.92 12 Add: Incentive for target availability - 27.43 (27.43) 13 Total Aggregate Revenue Requirement 3,057.64 3,029.14 28.50 2.2.3. In line with the provisions of the GERC MYT Regulations, 2016, GETCO has computed the gains and losses on account of controllable and uncontrollable parameters and its proposed sharing mechanism. Summary of the deviation allocation to Controllable & Uncontrollable factors is outlined as per the table below: Gujarat Energy Transmission Corporation Limited Page 8

Sr. No. Petition for True Up for and Determination of Tariff for FY 2018-19 Table 2 : Summary of Controllable & Uncontrollable factors Particulars (Approved) (Normative/ Actual) Gain/(Loss) due to Controllable Factor Rs. Crores Gain/(Loss) due to Uncontrollable Factor 1 Operation & Maintenance Expenses 1,275.38 1,289.42 (4.76) (9.28) 2 Depreciation 928.61 949.49 - (20.88) 3 Interest & Finance Charges 557.14 484.23-72.91 4 Interest on Working Capital 63.35 63.42 - (0.07) 5 Return on Equity 694.04 697.68 - (3.64) 6 Contingency Reserve - - - - 7 ARR (1 to 6) 3,518.52 3,484.25 (4.76) 39.04 8 Less : Expense Capitalised 194.13 209.75 - (15.62) 9 Less : Other Income 331.37 312.52-18.85 10 Add: incentive for target availibility - 27.43 - (27.43) 11 Add: Income Tax 64.62 39.74 24.88 12 Total ARR (7-8 - 9 + 10 + 11) 3,057.64 3,029.14 (4.76) 33.27 13 Net Gains / Losses on account of Controllable/ Uncontrollable factor (4.76) 33.27 14 Gain/ (Loss) on account of Controllable factor to be passed on to Consumer (1/3 x Sr. No. 13) (1.59) 15 Gain/(Loss) on account of Uncontrollable factor to be passed on to Consumer 33.27 2.2.4. The net revenue gap recoverable from the Open Access Beneficiaries has been computed and the same would be recovered through the annual transmission charges in the FY 2018-19. 2.3. NET RECOVERY 2.3.1. It is submitted that GETCO has recovered the provisional ARR for approved vide Order dated 31 st March, 2016 in Petition No. 1545 of 2016 (which was same as the ARR of FY 2015-16 approved by the Commission). Subsequently, the Commission approved the final ARR for GETCO for vide Order dated 31 st March, 2017 in Petition No. 1620 of 2016. Due to this, there is shortfall in the recovery of approved ARR for which is computed in this Petition and sought to be recovered through revised ARR for FY 2018-19. 2.3.2. Net recovery of GETCO for the is as per the table given below. The net recovery will be adjusted in the tariff determination for FY 2018-19; Gujarat Energy Transmission Corporation Limited Page 9

Table 3 : Net Recovery for Rs. Crores Sr. No. Particulars Amount 1 Provisional approved ARR for vide Order dated 31st March, 2016 in 2,772.05 Petition No. 1545 of 2015 - A 2 Final approved ARR of in MYT Order dated 31st March, 2017 in Petition No. 3,057.64 1620 of 2016 - B 3 Under-recovery of ARR for (A-B) (285.59) 4 Add: Impact of consequential order passed by Commission on 6.10.2017 and 25.10.2017 pursuant to APTEL Judgment in Appeal No. 201 of 2016 5 Gain / (Loss) on account of Uncontrollable factor to be passed on to Beneficiaries for FY 2016-17 6 Gain / (Loss) on account of Controllable factor to be passed on to Beneficiaries (1/3rd of Total Gain / (Loss) for 7 Total Gain/ (Loss) of the true up to be addresesd in the determination of tariff for FY 2018-19 (3+4+5+6) (10.99) 33.27 (1.59) (264.90) 2.3.3. GETCO requests the Hon ble Commission to approve the True-up for and allow it to pass on the (gap)/surplus on the approved tariff for FY 2018-19. 2.4. TRANSMISSION TARIFF FOR FY 2018-19 2.4.1. In accordance with provisions of the GERC MYT Regulations, 2016, ARR for FY 2018-19 as determined in Tariff Order dated 31 st March, 2017 is as follows: Table 4: Approved ARR for FY 2018-19 Rs. Crores Sr. No. Particulars FY 2018-19 (Approved) 1 Operation & Maintenance Expenses 1,556.19 2 Depreciation 1,132.95 3 Interest & Finance Charges 596.86 4 Interest on Working Capital 77.64 5 Return on Equity 846.67 6 Contingency Reserve - 7 Total Fixed Costs 4210.30 8 Add: Provision for Tax 64.64 9 Less: Expenses Capitalised 194.13 10 Total Transmission Charges 4,080.79 11 Less: Other Income 331.37 12 Add: Incentive for target availability - 13 Aggregate Revenue Requirement 3,749.42 2.4.2. GETCO has calculated the Transmission tariff for FY 2018-19 by adding net recovery for in the approved ARR for FY 2018-19 as mentioned above. Further, the MW allocation has been taken based on the projected loading of the transmission system for the FY 2018-19. The Transmission tariff of GETCO for FY 2018-19 after applying the gap of is as follows; Gujarat Energy Transmission Corporation Limited Page 10

Table 5 : Transmission tariff for FY 2018-19 Rs. Crores Sr. No. Particulars FY 2018-19 1 Aggregate Revenue Requirement approved in Tariff Order for FY 2018-19 3,749.42 2 Add revenue Gap / (Surplus) for for FY 2016-17 computed in this petition 264.90 3 ARR after considering Gaps of true-up for FY 2018-19 (1+2) 4,014.32 4 Total MW allocation 25,728 5 Transmission tariff Rs/ MW/ day 4,274.79 2.4.3. Recovery of Short-term Transmission Charges: As per sharing of inter-state transmission charges and losses Regulations 2010 and its amendments notified by the Hon ble CERC, for all types of short-term transaction, transmission charges are payable on per kwh basis i.e. transmission charges are applied on transaction through power exchange/ collective or bilateral. However, Hon ble Commission in the Order dated 31 st March, 2017 has allowed recovery of transmission charges on per kwh basis for power exchange/ collective short-term transaction and per MW/day basis for bilateral short-term transaction. This is leading to different treatment for two transactions done under short-term open access. To make the recovery of short-term transaction charges in line with CERC Regulations, it is proposed to allow recovery of transmission charges on per kwh basis for all types of short-term transactions irrespective of whether short-term transaction is done through power exchange or under bilateral arrangement. 2.4.4. GETCO has calculated the revised ARR for FY 2018-19 as Rs. 4,014.32 Crore. In MYT Order dated 31 st March, 2017, The Hon ble Commission has decided the methodology for working of short-term transmission charges on per kwh basis and worked out short-term charges for FY 2017-18. Considering the same methodology as adopted by the Hon ble Commission in the MYT Order dated 31 st March, 2017, GETCO has considered the Energy input of 89,632 MUs of Transmission System as per energy accounting of SLDC corresponding to Transmission Capacity of 21,547 MW during. Based on the actuals of the total estimated wheeled units during FY 2018-19 works out as 107,023 MUs on proportionate basis considering the Transmission Loading Capacity of 25,728 MW during FY 2018-19. As per the above methodology, transmission charges payable in the case of all types of short-term transactions works out to; TC (Rs/kWh) = Rs. 4,014.32 Crore/ 107,023 Mus = 37.51 Ps./ kwh Gujarat Energy Transmission Corporation Limited Page 11

SECTION 3. TRUE UP OF 3.1. PREAMBLE 3.1.1. This section outlines performance of GETCO for. In line with the provisions of the GERC MYT Regulations, 2016, GETCO hereby submits the True up Petition comparing the actual performance of GETCO during with the forecast approved by the Hon ble Commission vide Multi-Year Tariff Order dated 31 st March, 2017. 3.2. PRINCIPLES FOR TRUE UP FOR 3.2.1. As per GERC MYT Regulations, 2016, the Hon ble Commission shall undertake the True Up of the licensee for the past financial year i.e. based on the actual performance of the licensee in that year with the approved forecast for such year. 3.2.2. In line with the provisions under GERC MYT Regulations, 2016, GETCO is furnishing the information in the form of present petition to the Hon ble Commission, together with the audited accounts for and other details as the Hon ble Commission may require to assess the reasons for variation in financial performance from the approved forecast of Aggregate Revenue Requirement for FY 2016-17. 3.2.3. Accordingly, actual data for revenue and gap for are given in the following sections of this chapter. 3.2.4. For the purpose of True Up, all the expense heads have been categorized into Controllable and Uncontrollable factors as shown in the subsequent sections. Head wise comparison of the expenses has been made between the values approved by the Hon ble Commission vide MYT Order dated 31 st March, 2017 under Aggregate Revenue Requirement for and the actual figures for various expenditures for. 3.3. EXISTING CAPACITY OF GETCO IN 3.3.1. The capacity of GETCO network as on 31 st March 2017 was 101,259 MVA which is 10.61% higher than the capacity (91,544 MVA) as on 31 st March 2016. GETCO has shown capacity addition of ( 9,715 MVA) during the in comparison to the FY 2015-16 (11,431 MVA). In addition, GETCO is undertaking rapid augmentation of transmission network to cater to the power requirement across the State. 3.3.2. The table below summarizes the voltage level wise capacity of GETCO system i.e. as on 31 st March, 2017. Gujarat Energy Transmission Corporation Limited Page 12

Table 6 : Existing Capacity of GETCO in Voltage class (Capacity in MVA) Sr.No. Name of Circle 400 KV (MVA) (MVA) 132 KV (MVA) 66 KV (MVA) TOTAL (MVA) 1 Amreli 945 2,210 383 4,090 7,628 2 Anjar 945 1,800 140 2,851 5,736 3 Bharuch 1,445 2,400 520 2,488 6,853 4 Gondal 2,390 2,960 1,025 4,578 10,953 5 Himatnagar 1,500 1,660 540 3,229 6,929 6 Jambuva 1,815 2,750 1,940 4,247 10,752 7 Jamnagar - 1,010 838 2,525 4,373 8 Junagadh - 2,100 550 3,680 6,330 9 Mehsana 1,260 2,070 430 2,758 6,518 10 Nadiad 945 2,820 1,495 4,225 9,485 11 Navsari - 3,760 375 5,208 9,343 12 Surendranagar 1,575 3,080 200 3,670 8,525 13 Palanpur 2,130 2,390 403 2,913 7,835 Total 14,950 31,010 8,838 46,461 101,259 3.4. CAPITAL EXPENDITURE FOR 3.4.1. In order to ensure unrestricted power flow across the State of Gujarat and maintain an efficient transmission system, GETCO had spent significant amount of capital expenditure for construction of transmission lines and substations during FY 2016-17. GETCO had projected a total capital expenditure of Rs. 2,530 Crores in the MYT Order dated 31 st March, 2017 and incurred an actual expenditure of Rs. 2,370.89 Crores during. GETCO has incurred this expenditure in construction of new substation and transmission lines required for strengthening of the transmission network of GETCO. The comparison of CAPEX approved by the Commission and actually incurred during are shown below: Table 7 : Capital expenditure during Rs. Crores Particulars Approved Actual 765 KV Lines - - 400 KV Substations 85 187.22 400 KV Lines 632 337.57 Substation 119 119.15 Lines 208 366.55 132 KV Substation 18 30.84 132 KV Lines 19 18.97 66 KV Substation 372 509.86 66 KV Lines 190 272.37 Bus Reactor & SVC 40 - Capacitor Banks 24 1.61 Total of New Projects 1,707 1,844.14 R&M Renovation and Modernization 353 231.42 Augmentation of Sub-station/ Lines 464 290.62 City Development Plan and ASSIDE Scheme - 4.71 Total R&M 817 527 RTU 6.22 - Total 2,530.22 2,370.89 Gujarat Energy Transmission Corporation Limited Page 13

3.5. FUNDING OF CAPEX Petition for True Up for and Determination of Tariff for FY 2018-19 3.5.1. The capital expenditure has been funded through grants, equity and the remaining expenditure incurred during has been funded through debt. The breakup of funding of capital expenditure during is mentioned below. Table 8 : Funding of CAPEX Rs in Crores Sr. No. Particulars (Actual) A CAPEX for the Year 2,370.89 B Capitalization 2,163.93 C Grants 236.98 D Net Capitalization (B-C) 1,926.96 E Debt (70% of D) 1,348.87 F Equity (30% of D) 578.09 3.6. ADDITION TO TRANSMISSION LINES AND SUBSTATIONS 3.6.1. The details of Ckt. Km addition of transmission lines and substations during FY 2016-17 are as follows: Table 9 : Network addition of GETCO during Voltage Class 3.7. AVAILABILITY OF TRANSMISSION SYSTEM Substations (No.) Transmission Lines (Ckt. Km.) 400 KV 1 714-958 132 KV 1 103 66 KV 98 1,264 Total 100 3,039 3.7.1. In, GETCO has maintained its entire transmission system at exceptionally high level and achieved system availability of the tune of 99.40% (More than the benchmark specified in the Regulations for recovery of full transmission charges i.e. 98%). 3.8. TRANSMISSION LOSSES 3.8.1. The actual transmission losses for are as shown in the following table: Table 10 : Transmission losses of GETCO for Particulars (Actual - as per SLDC) (Actual - as per GETCO) Transmission Losses 3.88% 3.85% 3.9. NETWORK OUTAGES & FAULTS 3.9.1. For any transmission system, network outages & faults are the true performance indicators of the power system condition. In order to have an efficient transmission system, GETCO is taking up planned shut downs for periodic maintenance of its transmission lines and substations. Gujarat Energy Transmission Corporation Limited Page 14

3.9.2. The following table indicates the network outages and faults in the GETCO system for the. It may be worth noting that GETCO has been able to perform well in maintaining the system to its best level. Table 11 : Network outages & faults for GETCO for Network Component Type of Fault Unit Monthly average for the PSD Hrs/100km 4.521 400KV TT Nos/100km 0.330 SF Nos/100km 0.075 ESD Nos/100km 0.181 PSD Hrs/100km 6.913 220KV TT Nos/100km 0.373 SF Nos/100km 0.162 ESD Nos/100km 0.184 PSD Hrs/100km 9.065 132KV TT Nos/100km 0.820 SF Nos/100km 0.161 ESD Nos/100km 0.221 PSD Hrs/100km 10.111 66KV TT Nos/100km 1.182 SF Nos/100km 0.200 ESD Nos/100km 0.174 Wherein PSD: Planned shutdown TT: Transient tripping SF: Sustained fault ESD: Emergency shut down 3.10. LOADING OF TRANSMISSION SYSTEM 3.10.1. The actual loading of transmission system of GETCO for is given in the table below. Gujarat Energy Transmission Corporation Limited Page 15

Table 12 : Loading of transmission system for Sr. No. Station Rated Capacity Aux Cons (%) Gujarat Share Transmission Losses (%) Total MW on GETCO System A GSECL Plants 1 Ukai TPS Unit 1 to 5 850 9.00 850 774 2 Ukai TPS Unit 6 500 6.00 500 470 3 Ukai Hydro PS 305 0.70 305 303 4 Gandhinagar TPS Unit 3 to 4 420 10.00 420 378 5 Gandhinagar TPS Unit - 5 210 9.00 210 191 6 Wanakbori TPS Unit 1 to 6 1,260 9.00 1,260 1,147 7 Wanakbori TPS Unit - 7 210 9.00 210 191 8 Sikka TPS Unit No.1 & 2 240 11.00 240 214 9 Sikka TPS Unit No.3 & 4 500 8.50 500 458 10 Kutch Lignite TPS 290 12.00 290 255 11 Kadana Hydro 242 1.19 242 239 12 Utran CCPP Extension 374 3.00 374 363 13 Dhuvaran Gas Based - Stage-I 107 3.00 107 104 14 Dhuvaran Gas Based - Stage-II 112 3.00 112 109 15 Dhuvaran Extension CCPP-3 376 3.00 376 365 Total GSECL Plants 5,996 5,559 B IPPs 1 GIPCL Stage-I 145 2.90 145 141 2 GPEC (CLP) 655 2.90 655 636 3 GIPCL-SLPP 250 10.00 250 225 4 GIPCL-SLPP Extension 250 12.50 250 219 5 GSEG 156 2.90 156 151 6 GPPC Pipavav 703 3.00 703 682 7 GMDC - Akrimota 250 11.00 250 223 8 Adani, Mundra - Bid-01 (Unit-1 to 4) 1,320 1,000 1,000 9 Adani, Mundra - Bid-02 (Unit - 5 & 6) 1,320 1,000 1,000 10 Essar, Vadinar (Salaya) 1,200 1,000 1,000 11 ACB Limited 270 200 200 12 Siddhivinayak Glass Industries, Hazira 17-17 17 13 OPGS Power, Bhadreshwar 300 8 300 275 14 GSEG Extension Hazira 351 3 351 341 15 BECL, Padva, Bhavnagar (Unit - 1 & 2) 500 11.00 500 445 Total IPPs Plant 6,777 6,555 C Share from Central Sector 1 NPC - Tarapur 1&2 320 10.00 160 5 136 2 NPC - Kakrapar 1&2 440 12.50 125 5 103 3 NPC - Tarapur 3&4 1,080 9.00 274 5 236 4 NTPC - Korba 2,100 6.68 360 5 318 5 NTPC - Korba Unit-7 500 5.75 96 5 86 6 NTPC - Vindhyachal-I 1,260 9.00 230 5 198 7 NTPC - Vindhyachal-II 1,000 5.75 239 5 213 8 NTPC - Vindhyachal-III 1,000 5.75 266 5 237 9 NTPC - Vindhyachal-IV 1,000 5.75 240 5 214 10 NTPC - Vindhyachal-V 500 5.75 93 5 83 11 NTPC - Kawas 656 2.50 187 5 173 12 NTPC - Jhanor 657 2.50 237 5 219 13 NTPC - Kahalgaon 1,500 5.75 141 5 126 14 NTPC - SIPAT-I 1,980 5.75 540 5 482 15 NTPC - SIPAT-II 1,000 5.75 273 5 244 16 CGPL, Mundra (TATA UMPP) 4,150 1,805 5 1,715 17 SSNNL - Hydro 1,450 0.70 232 5 219 18 NTPC Mauda STPP Stage - 1 1,000 5.75 240 5 214 19 NTPC Mauda STPP Stage - 2 (Unit 1) 660 5.75 147 5 131 Total Central Sector Share 5,885 5,347 TOTAL 18,659 17,460 CPP Wheeling 227 227 Wind Power capacity 5,318 5,318 Solar Power capacity 1,230 1,230 Bio-Mass Power capacity 41 41 Mini Hydro 9 9 Total (MW) 25,484 24,285 3.11. ANNUAL FIXED COST FOR 3.11.1. As per the GERC MYT Regulations, 2016, the fixed cost has been computed under following heads: Operation and Maintenance Expenses Depreciation Gujarat Energy Transmission Corporation Limited Page 16

Interest and Finance Charges Return on Equity Interest on Working Capital Contribution to Contingency Reserve 3.11.2. Net Aggregate Revenue Requirement has been computed with addition of actual tax paid and incentive for achieving target availability and after deduction of Other Income & Expenses capitalized of GETCO. 3.11.3. For the purpose of True Up, all the heads mentioned above has been categorized into Controllable or Uncontrollable factors in line with provisions of GERC MYT Regulations, 2016, as discussed in subsequent sections of the petition. A head wise comparison has been made between the values approved by the Hon ble Commission and actuals to arrive at the revenue gap/surplus for the. 3.12. CATEGORIZATION OF HEADS OF EXPENSES 3.12.1. As per provision of section 22 of GERC MYT Regulations, 2016, expenses have been categorized into 2 factors viz. (1) Controllable (Under the control of the petitioner) & (2) Uncontrollable (Not under control of petitioner). The Hon ble Commission vide section 23 and 24 of its GERC MYT Regulations, 2016 has defined the mechanism for sharing of gain/ losses arising on account of uncontrollable & controllable factors respectively. 3.12.2. The details of the expenses categorized into the above factors have been covered in the subsequent sections. 3.12.3. Based on the existing practice for allocation & as approved by the Commission in previous years true-ups, all the items of expenditure for have been classified as either controllable or uncontrollable. Accordingly, the gains/ losses attributed to such controllable & uncontrollable factors have been determined in the subsequent sections. 3.12.4. GETCO has worked out its Aggregate Revenue Requirement (ARR) for as a part of the True Up for. GETCO has presented the actual cost components based on audited annual accounts for. 3.13. OPERATION & MAINTENANCE EXPENDITURE FOR 3.13.1. As per GERC MYT Regulations, 2016, O&M Expenses shall be computed based on the norms provided in clause 68.2.1 of the Regulations. As per the norms, the O&M expenses shall be computed based on the no. of bays and transmission line length (in Ckt.km). Accordingly, the normative O&M expense for the is given as below: Gujarat Energy Transmission Corporation Limited Page 17

Table 13 : Transmission lines & No. of bays for Sr. No. Particulars Reference Approved in MYT Order Normative Actual 1 Based on no. of Bays - Opening no. of Bays No. 11,811 11,811 - Addition during the year No. 569 784 - Average no. of bays during the year No. 12,095 12,203 2 Based on no. of Transmission lines - Opening Balance ckt km 54,605 54,605 - Addition during the year ckt km 2,080 2,424 - Average lines' length during the year ckt km 55,645 55,817 Sr. No. Table 14 : O&M cost (Normative / Actuals) for Particulars Reference (Approved) Rs. Crores (Normative/ Actual) 1 Based on no. of Bays - Average no. of bays during the year No. 12,095.40 12,203.00 - O&M exp norm per Bay Rs.lacs 7.60 7.60 - Total O&M Expenses based on no. of bays Rs. crores 919.25 927.43 2 Based on no. of Transmission lines - Average lines' length during the year No. 55,645.44 55,817.44 - O&M exp norm per ckt km Rs.lacs 0.64 0.64 - Total O&M Expenses based on no. of ckt km Rs. crores 356.13 357.23 3 Total O&M Expenses (as per norms) Rs. crores 1,275.38 1,284.66 3.13.2. GETCO has computed O&M expenses by considering the actual employee costs, R&M expenses & A&G expenses for the for working of gain/ (loss). The O&M expenses as per audited annual accounts are as shown in the table below: Table 15 : O&M cost (As per audited accounts) for Rs. Crores Sr. No. Particulars Actual 1 Employee Costs 942.72 2 R&M Expenses 252.18 3 A&G Expenses 94.52 4 Operation & Maintenance Expenses 1,289.42 3.13.3. O&M expenses are controllable in nature, under Regulation 22 of GERC MYT Regulations, 2016. However, as per the methodology adopted by the Hon ble Commission, the variance in the O&M expenses as approved in MYT Order and the normative O&M expense as per actual performance during the year is considered as uncontrollable and variation in the normative O&M expenses and actual as per audited accounts is considered as controllable. The O&M expenses and gains / (losses) considered in the Truing up for are summarized in Table below: Gujarat Energy Transmission Corporation Limited Page 18

Sr. No. Petition for True Up for and Determination of Tariff for FY 2018-19 Particulars Table 16 : Gains/ (losses) from O&M expenses (Approved) (Normative Actual) (As per audited accounts) Gain/(Loss) due to Controllable Factor Rs. Crores Gain/(Loss) due to Uncontrollable Factor 1 2 3 (2-3) (1-2) 1 O&M Cost 1,275.38 1,284.66 1,289.42 (4.76) (9.28) 3.14. DEPRECIATION FOR 3.14.1. The actual depreciation for works out to be Rs. 949.49 Crores. The Weighted Average Rate of Depreciation works out to be 4.96% which is higher as compared to 4.87%, the rate approved by the Commission for. 3.14.2. The depreciation to be allowed for the year should be based on the value of the gross fixed assets as stated in clause 39 of MYT Regulation, 2016. The depreciation for the has been taken from the Profit & Loss statement. 3.14.3. The variation in the amount of depreciation as per the actual cost incurred by Sr. No. GETCO in against the amount approved by the Hon ble Commission is Rs. 20.88 Crores. This can be considered as gain/ (loss) on account of uncontrollable factor and has been appropriately treated as indicated in below tables. Table 17 : Depreciation for Particulars (Approved) (Normative/A ctual) Rs. Crores Deviation 1 Gross Block in Beginning of the year 18,046.02 18,046.02 2 Additions during the Year (Net) 2,024.04 2,163.93 3 Depreciation for the Year 928.61 949.49 (20.88) 4 Average Rate of Depreciation 4.87% 4.96% 5 Total Depreciation claimed for 928.61 949.49 (20.88) Sr. No. Table 18 : Gain/ (losses) from Depreciation Particulars (Approved) (Actual) Gain/(Loss) due to Controllable Factor Rs. Crores Gain/(Loss) due to Uncontrollable Factor 1 Depreciation 928.61 949.49 - (20.88) 3.15. INTEREST & FINANCE CHARGES FOR 3.15.1. The opening loan balance for has been considered as the revised closing loan balance for FY 2015-16 approved by the Hon ble Commission vide consequential order dated 6 th October, 2017 issued pursuant to the APTEL Judgment in Appeal No. 201 of 2016. 3.15.2. The actual interest & finance charges incurred during are Rs. 484.23 Crores as against Rs. 557.14 Crores approved by the Hon ble Commission. 3.15.3. The weighted average interest rate on the loan portfolio during the year FY 2016-17, computed in accordance with Regulation 38.5 (first proviso) is 8.79%. Gujarat Energy Transmission Corporation Limited Page 19

3.15.4. The value of interest and finance charges approved by the Hon ble Commission and Sr. No. those actually incurred by GETCO for is shown as per the table below. The variation on account of Interest & Finance charges is considered as Uncontrollable factor and accordingly, GETCO has compared actual expenses vis-àvis the approved expenses and worked out deviation on account of uncontrollable factor. The same has been outlined in the tables given below: Table 19 : Interest & Finance charges for Particulars (Approved) (Normative/A ctual) Rs. Crores Deviation 1 Opening Loans 5,349.39 5,296.14 2 Loan Additions during the Year 1,227.68 1,348.87 3 Repayment during the Year 928.61 949.49 4 Closing Loans 5,648.46 5,695.52 5 Average Loans 5,498.93 5,495.83 6 Interest on Loan 556.14 483.08 7 Guarantee Charges 1.00 1.15 8 Total Interest & Financial Charges 557.14 484.23 72.91 9 Weighted Average Rate of Interest on Loan 10.11% 8.79% Sr. No. Table 20 : Gains/ (losses) from Interest & finance charges Particulars (Approved) (Normative/ Actual) Gain/(Loss) due to Controllable Factor Rs. Crores Gain/(Loss) due to Uncontrollable Factor 1 Interest & Finance Charges 557.14 484.23-72.91 3.16. RETURN ON EQUITY FOR 3.16.1. The return on equity for GETCO has been computed based on a rate of return of Sr. No. Sr. No. 14% as provided in the GERC MYT Regulations, 2016. The comparison between the values of return on equity for with the value approved by the Hon ble Commission in MYT Order dated 31 st March, 2017 is shown as per the table below. The deviation from return on equity is considered as Uncontrollable factor. Table 21 : Return on Equity for Particulars (Approved) (Normative/A ctual) Rs. Crores Deviation 1 Opening Equity Capital 4,694.39 4,694.39 2 Equity Additions during the Year 526.15 578.09 3 Closing Equity 5,220.54 5,272.48 4 Average Equity 4,957.47 4,983.43 5 Rate of Return on the Equity 14% 14% 6 Return on Equity 694.05 697.68 (3.64) Table 22 : Gains/ (losses) from Return on Equity Particulars (Approved) (Actual) Gain/(Loss) due to Controllable Factor Rs. Crores Gain/(Loss) due to Uncontrollable Factor 1 Return on Equity 694.05 697.68 - (3.64) Gujarat Energy Transmission Corporation Limited Page 20

3.17. INTEREST ON WORKING CAPITAL FOR 3.17.1. Working Capital is computed based on the norms provided in GERC MYT Regulations, 2016 by considering O&M expenses and receivables for 1 month and maintenance spares as 1% of historical cost (i.e. GFA). 3.17.2. As per GERC MYT Regulations, 2016, GETCO has considered weighted average of Sr. No. SBI Base Rate for plus 250 basis points i.e. 11.79%. The comparison of actual value of interest on working capital based on above methodology and the value approved by the Hon ble Commission is shown as per the table below. This deviation has been considered as gain/ (loss) to GETCO on account of uncontrollable factor. Table 23 : Interest on working capital for Particulars (Approved) (Normative/A ctual) Rs. Crores Deviation 1 O & M expenses (1 Month) 106.28 107.45 2 Maintenance Spares (1% of Cost) 180.46 180.46 3 Receivables (1 Month) 254.75 250.14 4 Total Working Capital 541.49 538.06 5 Rate of Interest on Working Capital 11.70% 11.79% 6 Interest on Working Capital 63.35 63.42 (0.07) Sr. No. Table 24 : Gains/ (losses) on Interest on working capital Particulars (Approved) (Normative/ Actual) Gain/(Loss) due to Controllable Factor Rs. Crores Gain/(Loss) due to Uncontrollable Factor 1 Interest on Working Capital 63.35 63.42 - (0.07) 3.18. INCOME TAX FOR 3.18.1. GETCO s actual tax worked out to be Rs. 39.74 Crores in as against Sr. No. approved tax of Rs. 64.62 Crores resulting into uncontrollable Gain of Rs. 24.88 Crores. The comparison of actual tax against the tax approved by the Commission is shown below: Table 25 : Gains/ (losses) on Income Tax Particulars (Approved) (Actual) Gain/(Loss) due to Controllable Factor Rs. Crores Gain/(Loss) due to Uncontrollable Factor 1 Income Tax 64.62 39.74-24.88 3.19. CONTRIBUTION TO CONTINGENCY RESERVE FOR 3.19.1. Contribution to Contingency Reserve for is nil as per the audited annual accounts of GETCO which is the same as approved by the Commission in the MYT Order dated 31 st March, 2017. The table indicating the Gain/ (Loss) on account of Contingency Reserves is shown below; Gujarat Energy Transmission Corporation Limited Page 21

Sr. No. Petition for True Up for and Determination of Tariff for FY 2018-19 Table 26 : Gains/ (losses) from Contingency Reserves Particulars (Approved) (Actual) Gain/(Loss) due to Controllable Factor Rs. Crores Gain/(Loss) due to Uncontrollable Factor 1 Contingency Reserve - - - - 3.20. INCENTIVE ON TRANSMISSION AVAILABILITY 3.20.1. GETCO has achieved an availability of 99.40% for its transmission network during FY 2016-17 certified by SLDC. 3.20.2. Regulation 67 of the GERC MYT Regulations, 2016 provides that the transmission licensee shall be entitled to an incentive for increase in annual availability beyond 98.5%. 3.20.3. GETCO has computed the incentive on higher availability based on the target availability for incentive purpose of 98.5% and the same is presented in the table given below. The incentive is calculated on Aggregate Revenue Requirement. Table 27 : Incentive for higher availability Rs. Crore Sr. No. Particulars 1 Target Availability as per MYT Regulations (%) 98.50% 2 Actual Availability (%) 99.40% 3 Aggregate Revenue Requirement 3,001.72 4 Incentive for Transmission System Availability 27.43 Sr. No. Table 28 : Gains/ (losses) on Incentive Particulars (Approved) (Actual) Gain/(Loss) due to Controllable Factor Rs. Crores Gain/(Loss) due to Uncontrollable Factor 1 Incentive for target availability - 27.43 - (27.43) 3.21. REVENUE FROM OTHER INCOME 3.21.1. GETCO has earned Rs. 312.52 Crores as non-tariff revenue for the in comparison to the approved values of Rs. 331.37 Crores. The heads under which non-tariff income is computed as below; Sr. No. Table 29 : Revenue from other income Particulars Rs in Crores GETCO 1 Interest on Staff Loans and Advances. - 2 Income from Investments deposits. 10.44 3 Interest on Advances to Others. - 4 Interest from Banks (other than on Fixed Deposits). - 5 Income from Trading -Stores,Scrap etc. 4.29 6 Penalties received from suppliers and consumers 38.86 7 Revenue subsidy & grant 0.19 8 Miscellaneous Receipts. 7.55 9 Contribution and Grants towards cost of capital assets 135.83 10 Gain on Foreign exchange fluctuation 10.20 11 Misc. Charges from Consumers 76.79 12 Parallel Operation Charges 28.38 13 Net Other Income 312.52 * Income from Scheduling charges of SLDC is substracted under the head Miscellaneous Receipts to determine net value for GETCO. Gujarat Energy Transmission Corporation Limited Page 22

3.21.2. Miscellaneous receipts includes other income like pro-rata charges, reactive energy charges, O&M charges for dedicated lines and supervision charges of deposit work as approved by Commission. 3.21.3. GETCO is also receiving grants/consumer contribution as deferred income during the year. The amount of deferred income received for the is Rs. 135.83 Crores as per the Annual Accounts. 3.21.4. The Net other income has been deducted from Transmission Charges to arrive at Sr. No. Aggregate Revenue Requirement for. Table 30 : Other income for Particulars (Approved) (Actual) Gain/(Loss) due to Controllable Factor Rs. Crores Gain/(Loss) due to Uncontrollable Factor 1 Other Income 331.37 312.52-18.85 3.22. AGGREGATE REVENUE REQUIREMENT FOR 3.22.1. Based on above expenses, table below summarizes actual Aggregate Revenue Sr. No. Requirement for for GETCO in comparison with values approved by the Hon ble Commission. Table 31 : Aggregate revenue requirement for Particulars (Approved) (Normative/A ctual) Rs. Crores Deviation 1 Operation & Maintenance Expenses 1,275.38 1,289.42 (14.04) 2 Depreciation 928.61 949.49 (20.88) 3 Interest & Finance Charges 557.14 484.23 72.91 4 Interest on Working Capital 63.35 63.42 (0.07) 5 Return on Equity 694.04 697.68 (3.64) 6 Contingency Reserve - - - 7 Total Fixed Costs 3,518.52 3,484.25 34.27 7 Less: Expenses Capitalised 194.13 209.75 (15.62) 8 Add: Income Tax 64.62 39.74 24.88 9 Total Transmission Charges 3,389.01 3,314.24 74.77 10 Less: Other Income 331.37 312.52 18.85 11 Aggregate Revenue Requirement 3,057.64 3,001.72 55.92 12 Add: Incentive for target availability - 27.43 (27.43) 13 Total Aggregate Revenue Requirement 3,057.64 3,029.14 28.50 3.23. SHARING OF GAINS & LOSSES 3.23.1. GERC MYT Regulations, 2016, specifies the mechanism for treatment of Gains and Losses on account of Uncontrollable and Controllable expenses. The methodology approved by the Hon ble Commission for sharing of such gains/ losses is as follows. 23. Mechanism for pass through of gains or losses on account of uncontrollable factors 23.1 The approved aggregate gain or loss to the Generating Company or Transmission Licensee or SLDC or Distribution Licensee on account of uncontrollable factors shall be passed through as an adjustment in the tariff of the Generating Company or Transmission Licensee or SLDC or Distribution Licensee over such period Gujarat Energy Transmission Corporation Limited Page 23

as may be specified in the Order of the Commission passed under these Regulations. 23.2 The Generating Company or Transmission Licensee or SLDC or Distribution Licensee shall submit such details of the variation between expenses incurred and revenue earned and the figures approved by the Commission, in the prescribed format to the Commission, along with the detailed computations and supporting documents as may be required for verification by the Commission. 23.3 Nothing contained in this Regulation 23shall apply in respect of any gain or loss arising out of variations in the price of fuel and power purchase, which shall be dealt with as specified by the Commission from time to time. 24 Mechanism for sharing of gains or losses on account of controllable factors: 24.1 The approved aggregate gain to the Generating Company or Transmission Licensee or SLDC or Distribution Licensee on account of controllable factors shall be dealt with in the following manner: (a) One-third of the amount of such gain shall be passed on as a rebate in tariffs over such period as may be stipulated in the Order of the Commission under Regulation 21.6; (b) The balance amount, which will amount to two-thirds of such gain, may be utilised at the discretion of the Generating Company or Transmission Licensee or SLDC or Distribution Licensee.. 24.2 The approved aggregate loss to the Generating Company or Transmission Licensee or SLDC or Distribution Licensee on account of controllable factors shall be dealt with in the following manner: (a) One-third of the amount of such loss may be passed on as an additional charge in tariffs over such period as may be stipulated in the Order of the Commission under Regulation 21.6; and (b) The balance amount of loss, which will amount to two-thirds of such loss, shall be absorbed by the Generating Company or Transmission Licensee or SLDC or Distribution Licensee. 3.23.2. As indicated above, GETCO has identified various expenditure heads under controllable and uncontrollable categories. The gain/ losses arising as a result of True Up for for GETCO shall be suitably passed through the Tariff as per mechanism specified by the Hon ble Commission. 3.23.3. Table below summarizes total gain/ (loss) to GETCO during on account of controllable & uncontrollable factors. Gujarat Energy Transmission Corporation Limited Page 24

Sr. No. Petition for True Up for and Determination of Tariff for FY 2018-19 Table 32 : Net gains/ (losses) for Particulars (Approved) (Normative/ Actual) Gain/(Loss) due to Controllable Factor Rs. Crores Gain/(Loss) due to Uncontrollable Factor 1 Operation & Maintenance Expenses 1,275.38 1,289.42 (4.76) (9.28) 2 Depreciation 928.61 949.49 - (20.88) 3 Interest & Finance Charges 557.14 484.23-72.91 4 Interest on Working Capital 63.35 63.42 - (0.07) 5 Return on Equity 694.04 697.68 - (3.64) 6 Contingency Reserve - - - - 7 ARR (1 to 6) 3,518.52 3,484.25 (4.76) 39.04 8 Less : Expense Capitalised 194.13 209.75 - (15.62) 9 Less : Other Income 331.37 312.52-18.85 10 Add: incentive for target availibility - 27.43 - (27.43) 11 Add: Income Tax 64.62 39.74 24.88 12 Total ARR (7-8 - 9 + 10 + 11) 3,057.64 3,029.14 (4.76) 33.27 13 Net Gains / Losses on account of Controllable/ Uncontrollable factor (4.76) 33.27 14 Gain/ (Loss) on account of Controllable factor to be passed on to Consumer (1/3 x Sr. No. 13) (1.59) 15 Gain/(Loss) on account of Uncontrollable factor to be passed on to Consumer 33.27 3.23.4. The above table summarizes the net gains/losses on account controllable/ uncontrollable factors. GETCO incurred a gain/ (loss) of Rs. (4.76) Crores on account of controllable factors and Rs. 33.27 Crores on account of Uncontrollable factors for. 3.23.5. As per mechanism specified in the GERC MYT Regulations 2016, GETCO proposes to pass on 1/3 rd of total gain/ (loss) on account of controllable factors i.e. Rs. (1.59) Crores and total gain/ (loss) on account of uncontrollable factor i.e. Rs. 33.27 Crores to the consumers. 3.24. REVENUE GAP FOR 3.24.1. As stated in earlier section, GETCO has computed the head wise controllable/uncontrollable gains/ (losses) for. The revenue gap has been computed based on the above factors against the approved costs by the Commission for the. 3.24.2. Further, it is submitted that GETCO has recovered the provisional ARR for FY 2016-17 approved vide Order dated 31 st March, 2016 in Petition No. 1545 of 2016 (which was same as the ARR of FY 2015-16 approved by the Commission). Subsequently, the Commission approved the final ARR for GETCO for vide Order dated 31 st March, 2017 in Petition No. 1620 of 2016. Due to this, there is shortfall in the recovery of approved ARR for to the tune of Rs. 285.59 Crores. GETCO has included this gap while determining the total gap on true up of. 3.24.3. The Hon ble APTEL has passed Judgment on 7 th September, 2017 in GETCO s Appeal No. 201 of 2016 challenging the Commission s Order dated 31 st March, 2016 in Petition No. 1545 of 2016. Pursuant to this Judgment, the Hon ble Commission has passed consequential orders dated 6 th October, 2017 and 25 th October, 2017. The net impact of both these orders works out to a net gap of Rs. 10.99 Crore. Gujarat Energy Transmission Corporation Limited Page 25

3.24.4. Further, the revenue (gap)/surplus for from True up of has been worked out to be Rs. 33.27 Crores on account of Uncontrollable factors and Rs. (1.59) Crores on account of Controllable factors (1/3rd of total gains/ (losses). 3.24.5. Table below summarizes Revenue Gap obtained after treating gains and losses from controllable and uncontrollable factor for : Table 33 : Revenue gap for Rs. Crores Sr. No. Particulars Amount 1 Provisional approved ARR for vide Order dated 31st March, 2016 in 2,772.05 Petition No. 1545 of 2015 - A 2 Final approved ARR of in MYT Order dated 31st March, 2017 in Petition No. 3,057.64 1620 of 2016 - B 3 Under-recovery of ARR for (A-B) (285.59) 4 Add: Impact of consequential order passed by Commission on 6.10.2017 and 25.10.2017 pursuant to APTEL Judgment in Appeal No. 201 of 2016 5 Gain / (Loss) on account of Uncontrollable factor to be passed on to Beneficiaries for FY 2016-17 6 Gain / (Loss) on account of Controllable factor to be passed on to Beneficiaries (1/3rd of Total Gain / (Loss) for 7 Total Gain/ (Loss) of the true up to be addresesd in the determination of tariff for FY 2018-19 (3+4+5+6) (10.99) 33.27 (1.59) (264.90) 3.24.6. It is requested to the Hon ble Commission to approve the above revised ARR and allow GETCO to pass on the Revenue Gap of Rs. (264.90) Crores obtained after treating gains/ (losses) for in Transmission tariff for FY 2018-19. 3.25. DETERMINATION OF TRANSMISSION TARIFF FOR FY 2018-19 3.25.1. In accordance with provisions of the GERC MYT Regulations, 2016, tariff for FY 2018-19 is determined as follows: Table 34: Approved ARR for FY 2018-19 Rs. Crores Sr. No. Particulars FY 2018-19 (Approved) 1 Operation & Maintenance Expenses 1,556.19 2 Depreciation 1,132.95 3 Interest & Finance Charges 596.86 4 Interest on Working Capital 77.64 5 Return on Equity 846.67 6 Contingency Reserve - 7 Total Fixed Costs 4210.30 8 Add: Provision for Tax 64.64 9 Less: Expenses Capitalised 194.13 10 Total Transmission Charges 4,080.79 11 Less: Other Income 331.37 12 Add: Incentive for target availability - 13 Aggregate Revenue Requirement 3,749.42 Gujarat Energy Transmission Corporation Limited Page 26