1. …Message Box ( Arial, Font size 18 Bold) Presentation Title ( Arial, Font size 28 ) Date, Venue, etc..( Arial, Font size 18 ) Suggestion/Objections to R Infra-D MYT Petition (FY 2012-13 to FY 2015-16) Case 09 of 2013 06.04.2013

2. …Message Box ( Arial, Font size 18 Bold) Tariff presented in Public Notice

3. …Message Box ( Arial, Font size 18 Bold) Tariff presented in Public Notice & MYT Petition R Infra-D has presented the Energy Charge in Table 11 of the Public Notice R Infra-D has presented that it would separately recover a Regulatory Asset Charge from consumers in Table 9 of the Public Notice The tariff increase presented in Table 12 does not include this Regulatory Asset Charge and gives a wrong impression to the consumer that the tariff is maintained at the existing level for almost all the categories By not indicating the category wise Reg. Asset Charge, the public notice does note correctly represent the tariff increase and the entire purpose of issuing a public notice is defeated It is submitted that the Honble Commission may direct R Infra-D to reissue the public notice to show the accurate proposed tariff

4. …Message Box ( Arial, Font size 18 Bold) Suggestions/Objections on R Infra-Ds MYT Petition

5. …Message Box ( Arial, Font size 18 Bold) Wheeling Charges Wheeling Charges are the cost payable to a licensee towards the usage of its wires network The changeover consumers of Tata Power have to pay these charges for using the R Infra network Wheeling Charge (Rs/kWh) = Wheeling ARR (Rs. Crs.) Units Wheeled (kWh) Hence, any increase in the numerator (Wheeling ARR) or decrease in the denominator (Units wheeled) will lead to higher wheeling charges (Rs./kWh) R Infra has proposed an 80% increase in wheeling charges by proposing an increased wheeling ARR and at the same time considering lower units wheeled

6. …Message Box ( Arial, Font size 18 Bold) Wheeling Charges The Wheeling ARR is directly impacted by the capitalisation for wires business Considering the decreasing consumer base and the existing established network of R Infra, the proposed capex of about Rs. 400 crores every year, is totally unjustified The Honble Commission may carry out a detailed examination of the same Wheeling ARR Unit Wheeled R Infra has reduced the units wheeled (denominator) in FY 2013-14 by considering higher switchover sales of about 1,500 MUs, whereas, switchover sales approved by the Honble Commission in Tata Powers Business Plan is about 336 MUs Considering the non-cooperation by R Infra for switchover, the switchover sales projected are unrealistic MERC may consider reasonable Wheeling ARR and Units Wheeled while computing the Wheeling Charge

7. …Message Box ( Arial, Font size 18 Bold) Cross Subsidy Surcharge (CSS) R Infra has proposed an increase in CSS such that it recovers about Rs. 468 crores from CSS in FY 2013- 14 National Tariff Policy states that the CSS should be brought down to 20% of its opening value at a linear rate Honble Commission has also held a similar view in its Order in Case No. 9 of 2006 MERC may not allow any increase in CSS and propose a road map for reducing existing CSS Without prejudice to our Appeal in the Supreme Court, the National Tariff Policy states that CSS should not be so high that it would make competition unviable

8. …Message Box ( Arial, Font size 18 Bold) Ratio of Sales and no of consumers to Total no of sales & consumers Residential (0-300)Other Consumers A look at the no of consumers of Tata Power shows that Tata Power has been making best efforts to welcome both High and Low end consumers alike. In terms of sales also Tata Power has managed to increase the low end consumer sales contribution from 1% (for direct consumers) to 12% (for changeover consumers) within a short span of three years

9. …Message Box ( Arial, Font size 18 Bold) Regulatory Asset Charge Changeover consumers, who have terminated relationship with RInfra-D in accordance with this Hon'ble Commissions order dated 15th October 2009 cannot be made liable to bear the burden of R Infra-Ds past revenue gaps and Regulatory Asset Charge cannot be imposed on these consumers Without prejudice to the above, it is necessary to identify the benefits derived by the consumers changed over in a year and accordingly charge the consumer such regulatory assets for the benefits availed by the consumer Regulatory asset is not a source of revenue for the distribution licensee and, therefore, it cannot be recovered from a consumer unless such reasonable nexus is established.

10. …Message Box ( Arial, Font size 18 Bold) Impact of increase in charges

11. …Message Box ( Arial, Font size 18 Bold) Increase in Charges for Changeover - Residential R Infra has proposed a humungous increase in charges to be levied to changeover consumers

12. …Message Box ( Arial, Font size 18 Bold) Comparison of Tariff - Residential Tariff Proposed Tata Powers Energy Charge is substantially lower for residential consumers

13. …Message Box ( Arial, Font size 18 Bold) Tariff Comparison for Changeover - Residential The differential of about 55% is proposed to be reduced to merely about 16% - 19% for residential consumers consuming less than 300 units. Further, tariff differential of about 70% for other residential categories translates into a loss of changeover consumers of about 4% - 10% Such exorbitant charges shall deter the consumers from exercising their option for supply

14. …Message Box ( Arial, Font size 18 Bold) Summary

15. …Message Box ( Arial, Font size 18 Bold) Summary IssueSuggestion/Objection Wheeling Charges Wheeling ARR to be reviewed from the perspective of high capitalisation Consider realistic switchover sales for reduction of units wheeled Cross Subsidy Surcharge No increase in CSS as it anti-competitive Roadmap for reduction of existing CSS Regulatory Asset Charge Should not be charged If at all, it has to be charged a nexus should be established with the benefits availed by the consumer

16. …Message Box ( Arial, Font size 18 Bold)