Power Grid Corporation Of India Limited · NSE:POWERGRID
Power Grid Corporation Of India — Investor Day
21 slides from Power Grid Corporation Of India's investor day presentation
Slide 1: CERC Draft Terms & Conditions of Tariff Regulation
CERC Draft Terms & Conditions of Tariff Regulation Presentation by POWERGRID 1
Slide 2: Major Issues for Consideration
Major Issues for Consideration • Operation & Maintenance Norms; • Availability Norms; • Return on Equity; • Timeline for Additional RoE; • Controllable & Uncontrollable Factor; • Useful life of Substation 2
Slide 3: Operation & Maintenance Norms
Operation & Maintenance Norms Factors need consideration : Time value of money while taking earlier expenditure. Forex variation, escalation (WPI/CPI). Efficiency need to be encouraged not discouraged. Efficiency is evolved and achieved over the years. The same can not be imposed on previous yea
Slide 4: Operation & Maintenance Norms
Operation & Maintenance Norms Operations and Maintenance Expenses Norms for AC & HVDC Lines & Bays (2009-14) 09-10 10-11 11-12 12-13 13-14 S/C(Twin & Triple Conductor) (Rs. Lakh/km) 0.358 0.378 0.400 0.423 0.447 400kV Bay (Rs. Lakh/Bay) 52.40 55.40 58.57 61.92 65.46 Norms for AC & HVDC Lines & Bays
Slide 5: Operation & Maintenance Norms
Operation & Maintenance Norms Calculation of CAGR of O&M expenditure of transmission as per draft Regulation SI Parameters 08-09 09-10 10-11 11-12 12-13 Normalized O&M expenses allocated A 53083 67476 75734 88866 97634 to S/S (70% of A) B Equivalent No. of sub-station bays 1256 1301 1429 1692 2063 %
Slide 6: Normalization of O&M Expenditure
Normalization of O&M Expenditure Parameters 10-11 11-12 12-13 Equivalent (400 kV) no. of bays 1429 1692 2063 % incerase from pervious year 10% 18% 22% Manpower 3133 3170 3107 % incerase in Manpower for Bays 0% 1% -2% Equivalent (S/C - Twin Conductor) 73071 82213 91395 % incerase from pervious year 8
Slide 7: Escalation Factor for O&M Charges
Escalation Factor for O&M Charges O&M expenditure per equivalent (400 kV) AC bay • If CAGR is calculated till (70%) 60 8.25% 2011-12, the overall escalation 50 factor is around 8.25% which 40 is almost in line with the CPI: 30 WPI indices of 8.35% 20 CAGR- 7.51% 10 • Reduction in O & M expenses 0 sp
Slide 8: Operation & Maintenance Norms
Operation & Maintenance Norms Submission: Keeping present and future grid conditions, technical & economic scenario in the country to provide scope for enhanced performance through new technologies for ensuring reliable and secured services to the consumers, Hon’ble Commission may consider reasonabl
Slide 9: Availability Norms
Availability Norms Need of sufficient time for planned maintenance. No time/money pressure on maintenance staff to compromise maintenance. Incentive for better performance to bring motivation. Effect of change in grid configuration from 400 kV to 800 kV level, Renewable Energy on availabilit
Slide 10: Availability Norms
Availability Norms Submission: Hon’ble Commission may, therefore, reduce the target availability for the tariff control period 2014-19. 10
Slide 11: Return on Equity
Return on Equity Returns have been considered commensurate to the movement of SBI PLR/G-Sec rates in previous Regulations Same principle needs to be considered in view of the following: Indices 2001-04 2004-09 2009-14 2014-19 G-Sec rates 10.33 (Mar’01) 5.43 (Feb’04) 7.12 (Nov’08) 8.76 (Jan’14) P
Slide 12: Timeline for Additional RoE
Timeline for Additional RoE The stipulated timeline for additional RoE of 0.5% is impractical and almost difficult to achieve. Timelines proposed by the Task Force set up in 2005 by MoP only represent the construction period Transmission Work Timeline as per draft Regulations Timeline as per Rep
Slide 13: Timeline for Additional RoE
Timeline for Additional RoE The Task Force report stipulate that schedule indicate construction time of a T/L & S/s. Therefore, suitable margins need to be kept for completion of all the elements of a Project/system. ROW and Land Acquisition factors have become more serious today. Despite larg
Slide 14: Controllable & Uncontrollable Factor
Controllable & Uncontrollable Factor Draft regulations defines Land Acquisition and ROW issues as controllable factors. ROW issues are becoming most critical in transmission line construction day by day and may further become much more critical with passage of time. • Land is not acquired but crop
Slide 15: Controllable & Uncontrollable Factor
Controllable & Uncontrollable Factor Submission: ROW issues and land acquisition may, therefore, not be considered as controllable factors. However, the same may be examined by the Hon’ble Commission while passing the tariff order. 15
Slide 16: Useful life of Substation
Useful life of Substation CEA (Technical standards for Electric Plant and Electric Lines) Regulations 2010 : Sub-stations to be designed for a life span of not less than 25 years – therefore designed for 25 years International Research Institute (EPRI, USA) : useful life of switchyard components
Slide 17: Thank You
Thank You 17
Slide 18: Employee Cost
Employee Cost CERC has currently considered Exclusion of PRP from Employee Expenses Performance pay is an integral part of employee salary The same is not over and above the cost to company for any employee • Exclusion of the same makes senses only when the same is over and above the compensat
Slide 19: Comparison with Generation
Comparison with Generation Generation Transmission Escalation Factor: Escalation Factor : CAGR @6.35% per annum based on the Effective CAGR @ 4.14% of increase in increase in Normalized O&M Expenses Normalized O&M Expenses for 2008- for 2008-09 to 2012-13 for Generators 09 to 2012-13 (coal: 5.71%; G
Slide 20: Activity chart for land acquisition for substation
ACTIVITY CHART FOR LAND ACQUISITION FOR SUBSTATION UNDER THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION AND REHABILITATION & RESETTLEMENT ACT, 2013 Substation Site Selection Submission of Proposal for Land Acquisition Notification under sec-4 Notification Social Impact Assessmen
Slide 21: Controllable & Uncontrollable Factor
Controllable & Uncontrollable Factor Land Acquisition for Substations The Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation & Resettlement Act 2013 has come into force w.e.f. 1st Jan. 2014 Final Rules are yet to be notified. The proposal, Social Impact Assessment, S