A.P.
TEXTILE MILLS ASSOCIATION
(FORMERLY KNOWN AS A.P. SPINNING MILLS ASSOCIATION
2nd Floor Manoharam Skin Clinic, 4/2, Lakshmipuram, GUNTUR - 522 007, A.P.. India
GSTIN: 37AAECA5403A1ZC Tel.: 91 -863-2244146 E-mall: contact@[Link]
Lr. No.32 / APERC Observations- Comments / 2023-24 dated 3.7.2023
Guntur
Dt. 26.6.2023
To
The Secretary,
AP Electricity Regulatory Commission (APERC),
[Link]. 11-4-660, 4‘^ Floor, Singareni Bhawan,
Red Hills,
Hyderabad
Sir,
Sub: Observations, Comments, and Suggestions on Load Forecasts, Resource
Plans, Investment Plans, and State Electricity Plan for 5th Control Plan (FY
2024-29) and the 6TH Control Plan (FY 2029-34) of APTRANSCO &
APDISCOMS- Reg...
,J)®A^^tii^)submit our observations, comments, and suggestions on the Load
Forecasts, Resource Plans, Investment Plans, and State Electricity Plan for the 5th
Control Plan (FY 2024-29) and the 6th Control Plan (FY 2029-34) of APTRANSCO &
APDISCOMS.
Upon reviewing the proposed Load Forecasts, Resource Plans, Investment Plans, and
State Electricity Plan, we would like to furnish our observations enclosed herewith for
your kind consideration.
Yours Sincerely,
Secretary
AP Textile Mills Association
Copy submitted to
1. The CMD, APCPDCL, Vijayawada
2. TheCMD, APSPDCL, Tirupathi
3. The CMD, APEPDCL, Visakhapatnam
4. The APTRANSCO. Vijayawada
1
A.P. TEXTILE MILLS ASSOCIATION
(FORMERLY KNOWN AS A.P. SPINNING MILLS ASSOCIATION
2nd Floor Manoharam Skin Clinic, 4/2, Lakshmipuram, GUNTUR - 522 007, A.P, India
GSTIN: 37AAECA5403A1ZC Tel.: 91 -863-2244146 E-mail: contact@[Link]
Andhra Pradesh Textile Mills Association
Our Observations, Comments and Suggestions in the matter of
Load Forecasts, Resource Plans, Investment Plans and State Electricity Plan
For 5"’ Control Plan (FY 2024-29) and the 6™ Control Plan (FY 2029-34)
Of APTRANSCO & APDISCOMS
26™ JUNE 2023.
2
Andhra Pradesh Textile Manufacturers Association (APTMA) represents the Textile
industry in the state having eighty Textile mills as its members and has the interests of
about a lakh of workforce in direct employment and another 50,000 indirect service
providers. For the record, the textile mills in the state jointly has a connected electrical
load of 300 MW. The Textile mills are energy intensive and its viability is extremely
sensitive to energy costs. Thus we as an industry have concerns in the plans, financial
performance and investments of the APTRANSCO, AP DISCOMS & APGENCO.
1.0: INTRODUCTORY OBSERVATIONS. A capital expenditure of Rs 15,729
CRORES for APTRANSCO & Rs 46160 Crores for APDISCOMs during 5™ control
period (CP) FY (2025-29) is forecasted for energy consumption of 438010 MU during
the CP. The investment augmentation proposed for this plan period is Rs 1.412 /unit.
(Ref P.85, P.13&99 of State electricity plan -SEP)
1.1: A further capital expenditure of Rs 12,920 for APTRANSCO& Rs,47706 CR is
Proposed for APDISCOMs during 6^^ Control period (FY2030-34) for a forecasted
energy consumption of 586470 MU during the CP. The incremental CAPEX
proposed is Rs 1.034/unit consumption. Thus APTRANSCO is proposing a capital
expenditure of Rs 122515 during the 5™ AND 6^^ CP between FY (2025-
34).(P.13,14,85&99 SEP) Summary in page 8 of this document
1.2; This is independent of expenditures during 2023 &2024 (P.99) of RS 13472.
1.3: The expenditure proposed has not yet been approved by MoP (P.98 of SEP)
1.4: The CAPEX is based on a forecast of ENERGY COSUMPTION & therefore Energy
purchase requirement & consequent GENERATION planning & PPAs.
1.5: The current regulations allows a pass through across the Supply chain with the
ULTIMATE CONSUMER shouldering the consequences of omissions & commissions of
incorrect forecasting or planning. In fact this honorable commission would be aware
that there have been brazen attempts to claim even “REVENUE TRUE Ups “by the
DISCOMs, which fortunately as of now is disallowed by Regulations.
2.0: Our Apprehensions* on the STATE ELECTRICITY PLAN (SEP)
2.1: DISCOMs forecast a CAGR of 6.64 % in Energy and 7.34 % in Demand (MW) as
reported by SEP in a 10 year plan across the 5’^ & 6*^ CP appears TOO optimistic , if
their forecasting skills of demand category wise & revenue as seen over last 5 years
and more in ARR’S is to go by , questionable too. Under the circumstances CEA’s EPS
graph without any other supporting documents is not ASSURING. We appeal to the
honorable commission that a the report of CEA be made public and further that the 5*'’
CP be subject to midterm review, as is required by the act & also as a principle of
abundant caution to protect paying consumer from forecasting errors to their deterrent...
2.2: The CAGR projected in 5™ CP for Domestic at 5.3 %, for HT industries 8.48%
and Railways at more than 10% is too ambitious and improbable. We note similar
improbable projections in 6^'’ CP too for Irrigation going at 4% plus . Ministry of
Railways has reported that they are a “Deemed distribution licensee under the
Electricity act 2003" and as we understand
“Railway Energy management company Ltd (REMCL)” have been tasked to economize
& to source NCE for Traction AND FURTHER REDUCE NON-TRACTION freight. An
analysis of last five years of energy consumption without the corona period will reveal
that a forecast HT of 8% + and 5% during 5^^ AND 6^^ C.P. respectively is certainly
over ambitious, it is pertinent to add that an analysis of T.O of this Honorable
commission from FY 2015-16 TO FY 2022-23 will reveal that the DISCOMs years have
over estimated SALES from Revenue yielding HT Industry, Commercial & even
Railways ,whereas under-estimated LT Agriculture .
However, the commission have YEAR AFTER YEAR reduced/ tempered the projections
before approval. A reference to TABLE 8 IN PAGE 28 of the T.O of FY 2023-24 will
conclusively show that even the APPROVED SALES have not been met in any year
.We therefore request the commission to review the FORECASTED energy sales ,
procurement needs ,Generation capacity needs and the attendant Transmission &
Distribution network requirements. It would seem that APTRANCO want us to rely on
their SEP forecast based on the correlation of their & CEA forecast as shown in the
graph in Page 16 of the SEP. From the same Table 8 in page 28 of T O of FTY2023-24
, a cross check on actual CAGR of growth show 5.5% between FY2015-16 to
FY2019-20 shows and it is 5.8% even post corona FY20-21 AND FY 22-23 .This is
less than DISCOM forecast of 6.17% for 5'^ Control period and close to a more realistic
forecast of 5.1% for the 6™ CP. Sensitivity analysis of their has not been shown in
terms of effect on investment cost.
3.0:.STATE ELECTRICITY PLAN, WITHOUT A REVIEW OF EARLIER PLAN .THE
4^" CONTROL PERIOD?
Ideally every business plan starts with a review of the previous period plan versus
ACHIEVED with detailed explanatory notes for deviation with an action plan for
corrective action.
Surely the consumers of electricity in the state are entitled for such a REVIEW FOR
THE 4^^^ CP, FOR THAT WILL SHOW WE CONSUMERS THE HISTORICAL TRENDS
and based on the survey reports and any other national ECONOMIC surveys
FORECASTS BY NITI UDYOG, arrive at reasoned conclusions.
4
4.0 COMPARISON OF LOAD FORECASTS..
It appears that APTRANSCO & DISCOMs want us to totally rely on the SEP
forecast shown in Page 16 by a graph, where SEP & EPS of CEA is shown to
have near exact GRADIENT,
Other than one graph there are NO further details in the SEP available to us.
The demand for electricity varies in energy terms and also load factor and thus
demand in MW. Total of various categories of consumers’ right from
DOMESTIC, AGRICULTURE, INDUSTRY, COMMERCIAL is the
Sum of energy &also Demand . Growth of any category is not identical to the
other category nor are they every time inter dependent. We are conclusive that
each consumer category have growth trends independent of other categories
and therefore should be evaluated and studied separately for arriving at energy
demand. Further the load factor across categories vary and therefore the
demand in MW will also vary and it is not clear how even that
MW graph is linear and with same gradient. We request APTRANSCO to explain
this, which we think is a long arm of coincidence. This appears to be Highly
improbable, but not impossible.
4.1 GENERATION PLAN fRef P.17 to 371 The Installed capacity (MW)
as on 31®^ March 2023 as reported by the State electricity Plan for S'*’ CP & 6^*^ CP
ARE AT VARIANCE WITH APERC T.O FY2023-24 .
TABLE 37 Approved : Energy availability fMU) T.O APERC FY 2023-24
Chapter -IV Page 92
S.N SOURCE Discoms Total for
O TOTAL Three
CAPACITY DISCOMs
MW MU
1 APGENCO Thermal 3410 20154.38
2 APGENCO New 800 3248.002
Thermal
[Link]
3 APGENCO HYDEL 1656 3130.24
4 Interstate HYDEL 141.6 498.19
5 APGENCO TOTAL 6007.6 27030.81
6 CG Stations 1443.47 11446.91
t ouimiR o
7 NCE/RE plants 8253.43 14184.37
8 APPDCL Staqel 1600 7884.52
9 APPDCL Stage 11 800 4606.1
10 Godavari gas power 216 543.96
plant______________
11 Thermal powertech 231 1712.04
corpn
12 SEIL 625 4304.7
13 HNPCL 1040 6568.85
14 TOTAL 20216.05 78282.26
The State electricity Plan fSEP) for 5*^ and 6*^ Control plan Generation plan
as on 31-3-2023
[Link] Source AP SHARE Reference
In MW IN SEP
1 APGENCO 3.1.1
Thermal 3410 Page 17
Total
2 APGENCO 1656 As above
Hydel
total
3 Inter state 118 As above
Hydel
4 Joint sector 2456 3.1.4
APPDCL& Page 19
Godavari gas
5 CGS 1979 3.1.5
Page 20
6 IPPs Thermal
HNPCL 1040 3.1.7
SEIL-1 231 Page 24
SEIL-2 625
7 NCE 7627 3.1.8
Page 24
TOTAL 19142
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A few comments
1. SEP Document apparently understates AP State share of installed available
as on 31-3-2023 by 1074 MW.
2. Whereas T.O 2023-24 shows in page 78 of the said order in seriatim 2 as
APGENCO NEW Thermal [Link] V and shows 3261 MU as available,
46.5% of the Normative. Whereas SEP document shows 800 mw AS
capacity addition between FY 2023-24 to FY 2028-29 in page 26 in paragraph
3.2
3. SEP has considered NCE Availability as 7627 MW, whereas APERC has
considered in the last Tariff order 8253 MW.
We request the honorable commission to direct the
APTRANSCO/DISCOMs to reconcile the availability of load in MW.
4.2 APERC has disallowed about 500 IVIW FROM CGS STATIONS. WHEREAS
SEP Claims there is a paucity to meet base load without this 504.74 MW
______________ f As given in SEP -PAGE 21 & 22),
This Honorable Commission in “The Tariff order retail of FY 2023-24 f PARA 112 IQ
116 PAGE 86.87 & 88) “has already explained in detail the sufficiency of “ base thermal
generation capacity 9982 MW Thermal apart from the availability of approximate base
capacity of 2000 MW Solar power during day time for an entire year ,2500 MW wind
power during the wind season and 500MW Hydel power during rainy season even after
exclusion of the said four CGS “ in fact the order goes to categorically affirm that" Even
assuming availability of 80% capacity at any time, the base capacity requirement of
8000 MW for all time blocks during the FY 2023-24 ( AS GIVEN IN Resource plan of
the 4^‘ CP can easily be met)
And the Honorable commission STATES “ Hence even without the power from
the four CGS .THE REQUIRED DEMAND can be met from other available sources
We are not clear whv the SEP continues to require in the above referred 550 MW
LOAD from CGS REFERRED TO IN pages 22&22 of SEP_ " APSLDC/APDISCOMs
are of the opinion that the existing base load
generation capacity from intrastate generation stations without these four CGS
Stations aggregating to about SOOMW^ wiii not be sufficient to meet the base load
persistent on the system for all time blocks in a year with the stringent
requirement to comply with The Honorable CERC regulations
X GUHTUR S
It is our opinion that this persistence of SEP FOR THE 500 MW of the CGS
NEGETIVED BY APERC means there is an unexplained constraint AS PERCEIVED
BY APSLDC/APDISCOMs.
This contradiction APSLDLDC/APDISCOMs be directed bv this honorable
commission to explain.
3.0ENERGY DEFICIT DURING 5“^^ & 6^^ CP.
5,1 we note the shortage is expected, as per forecast every year of both
the CP. In the 5*^ CP they expect shortfall ranges from 237 MU to a max of 5036
MU in FY 2029-30. The SEP states “peak energy deficit will be met either by
purchasing from Power exchange or power procurement through bidding
The shortage ranges from 0.26% to 4.6% in energy terms. This shortage can be
met by a 800 MW running at 80% of its Normative load.
All the APGENCO Thermal plants (4210 mw) enjoy GENERATION NORMS
even now governed by the vintage Regulation 1 of 2008 whereas the current
CERC GENERATION REGULATIONS are of the year 2019 & will be again
updated in 2024. We note with disappointment that the APTRANSCO
/APDISCOMs have neither mentioned nor filed any petition with APERC
requesting updating of GENERATION TARIFF REGULATIONS. OUR
ASSOCIATION AND FEW OTHER STATE INDUSTRY BODIES HAVE
REQUESTED APERC THE UPDATING OF GENERATION TARIFF NORMS.
The updating of the regulations will cover requirements of about 250 mw at 80%
Normative, up to FY2027-28 & 50% of FY2029-30. We once again request the
honorable commission to updating the REGUATiON 1 OF 2008.
5.2 Deficit in MU forecasted for 6^^ CP is ranging between 9057 MU in FY
2029-30 to 39977 MU BY FY 2033-34 equivaient to a capacity addition of
1300 MW TO 5700 MW thermal plant running at 80% of the normative load
.However paragraph 3.8 in SEP PAGE 33 confirms that “The state will be
deficit in the S'" control period as there is no significant capacity addition “.
We are not clear why there is no plan to overcome deficit. Is it a deliberate plan
to study new technological emerging options like Hydrogen? We request
the DISCOMs to clarify. A GREENFIELD Power Plant TAKES 6-7 years time
frame from conception to commissioning.
5.3 RETIREMENT OF OLD PLANTS DEFFERED AND MOP HAS ADVISED
R&M FOR LIFE EXTENSION .FLEXIBILITY & RELIABILITY . f Reference
paragraph 3.14 In SEP PAGE 37)
8
_ There is no detail in the report as to what flexibility, life extension and
reliability entails. Are the technical minimum PLF going to brought to 40 or 45%,
how many year life extension and
More importantly what is capital expenditure and has it been factored in
Rs122515 crores CAPEX proposed in the S**' and 6^ CP?
6.0TRASMISSION PLAN & DISTRIBUTION PLANNING ( Reference Paragraphs
to 4.5 in pages between 35 and 85 AND Paragraphs 5 to 5.8 between pages
86 to 99 of the SEP FOR CONTROL PERIOD).
The T& D PLANNING is fundamentally based on the load forecast for the final
consumers. Thus key driver for T& D PLANNING is LOAD forecasting. It is trite
& obvious to state that resource planning is SENSITIVE TO THE ACCURACY
OF Load forecast. It is therefore necessary that the more rigorous newer
statistical tools, which are certainly very elaborate, is necessary to be adopted
for load forecasting .The limitation of simple trend analysis for forecasting is not
unknown to the DISCOMs who have seen the limitation in their ARR over the
years.
We note that the paragraph 4 &5 FOR T&D PLANNING in the SEP is very
detailed .Suffice to state that the technical needs and specification lies within the
expertise of APTRANSCO/DISCOMs and beyond our scope. We note that SEP
(Page 98} is awaiting MOPs approval for CAPEX and by inference we presume
approval of the equipments and supporting infrastructure.
We are confident that this Honorable commission would base their approval for
gth Qp resource plans, after receipt of approval from MOP.
A FEW CLARIFICATIONS REQUESTED ON THE SEP
6.1 There is a balance unexplained CAPEX for FY 2024, as detailed
below .This appears to be balance for 4™ Control period but SEP does
not explain if this is part of the original 4''’^ CP or a cost escalation or a
contingency? As shown this is Rs.13491.76 crores. We request
APTRANCO/APDISCOMs to confirm. Ideally, as stated elsewhere a
detailed plan versus actual for 4'^ Control would have been a correct start
point for SEP OF 5™ & 6"^^ C.P. A true up of the 4™ CP would have
cleared many a doubt & current status.
V
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DISCOM CAPEX in Reference in
[Link] SEP 5™&6™ CP
APEPDCL 4057.76 Page 92
APCPDCL 3715 Page 95
APSPDCL 5719 Page 99
Total 13491.76
6.2SEP of CP (FY 2025 TO 2029) proposes a Generation capacity
addition of 11050 MW for which a transmission and Distribution
augmentation & Network infrastructure CAPEX Is projected for Rs 61889
CR (Reference 85& P.99 of SEP) and an energy transmission &
distribution increase from 83275 MU in FY 2025-26 to 108765 MU, an
increased need to transmit & distribute 37.5% & capacity addition of
11172.3 MW, A CAPACITY increase from20216 MW to 31,388 MW AN
INCREASE OF almost 55% in 5 years OF 5™ CP. As shown in the PI
Chart in page 32 of SEP , the share of installed capacities as on 31®‘
March 2029 is shown below :
Installed Capacity in MW as on 31®^ March as conformed by APERC
T.O FY2023-24
20216 MW
Forecasted Capacity as on 31®‘ March 2029
SOURCE CAPACITY %
MW
Thermal 10454 34
Gas 216 1
Hydro 2963 9
RES 15786 51
Nuclear 234 1
PSP 1350 4
Total 31003 100
There is no addition of capacity DURING 6^^ C.P and and the dispatch
of energy will marginally come down from 105673 MU IN FY 2030 tO
103233 MU by end of 6*^ CP.
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7. Summary of the RESOURCE PLANS of 6**' C.P
[Link] ITEM REMARKS
DESCRIPTION CONTROL CONTROL
PERIOD PERIOD
FY2024-30 FY2030-35
1 Capacity MW
At start of C.P 20216 31003 20216 Table 37
T.O FY22023-
24
At end of C.P._____ 31003 31003
2 Energy dispatch MU
At start of C.P. 78282 105673
At end of C.P. 103729 103233
3 Total Consumption 488010 526916
Entire C.P. MU
4 Deficit in Dispatch
In MU.
At start of C.P. -2241 -9057
At the end of C.P. -5036 -39377
5 Capex in Rs CR
APTRANSCO 15727 12920
APDISCOMS 46160 47706
TOTAL 61889 60626
6 CAPEX PER MU
(5.1 row*10)/row3 RS.3,22,268 RS.2.45,200
APTRANSCO
(5.2 ROW*10)/Row RS 9,45.882 RS.9.05,381
3
APDlSCOMs
(5.3 row*10)/row 3
Total APTRANSCO RS. 12,68,191 RS.11,50582
+
APDlSCOMs
7.1 SOME OBSERVATIONS & QUERIES.
7.1.1 In spite of a plan to investment plan of Rs.1, 22,515 CR. During the 5‘^ &
6^'’ Control periods there is energy deficit all through the plan periods. The deficit
is marginal in 5‘^ C.P but is high at 38.75% in terms of dispatch by 2034.
/!%
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7.1.2 After an investment of Rs 60,626 CR during 6™ C.P. there are
continuous deficit in supply. The obvious question," are we missing something
in the SEP approach? Is it a planned shortage before deciding on a new
technology of generation or BSS technology? Or is there a non-availability of
Transmission or distribution network due to the substantial variable green power
added in the network. We request the APTRANSCO/APDISCOMs to enlighten
us consumers.
8. Positive steps in the resource plans of 5^*^ CP & 6^^ C.P^
A. From a 51 % Installed Thermal capacity at 10,165 MW & 41 % RES of the total
installed capacity of 20216 MW On 31®‘ March 2023 to no additional Thermal
capacity planned during S'*" and 6^" C.P. and reaching the installed capacity
as on 31 March 2029 with Renewable capacity 157886 MW targeted at
51% compared to Thermal of 10454 MW at 34%.
B. We note that at the end of 5^^ C.P. besides RES of 51%, Hydel constitutes
9% and PSP IS 4%.This effectively means at the end of 5™ C.P, the state will
have a Green electricity installed capacity of 64%, Gas 1%, Nuclear 1% and
Thermal down to 34%. This transition to green energy with Hydel &PSP OF
4% is, we believe, a step in the right direction. Thus aligning the SEP with the
National Electricity policy towards RES goals and India's commitment to
UNFCCC to bring carbon emissions to net zero by 2070. Besides there will
be opportunities for industries and even DISCOMS TO EARN CARBON
CREDITS.
C. We are happy to note that SEP has devoted a full section (PARA 2.1 Page 10
&11) in their 5*^ & 6^'^ C.P. For SOLAR ROOF TOP. They have recorded
that solar roof has grown from 150 MW in FY18 to 490MW IN FY23 ,A
CAGR OF 26.7%.AND EXPECT a modest CAGR of 10% & 5% in 5*^ CP &
6™ C.P. RESPECTIVELY
D. Battery storage systems and PSP is being all policy required
encouragement and will help mitigate the variability issues of wind & solar. A
step again in the direction of Green power.
E. The tie up with Rajasthan Solar for 10000 MW is heartening as it is for day
time continuous supply for Agriculture. This will be an energy security for the
farmers and a long term solution to financial subsidies burden of “FREE
POWER” of the state.
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9. OUR CONCERNS IN THE SEP FOR 5^^ AND 6^^ C.P.
A._Load Forecasting is the key driver in the entire Resource planning exercise. A
combination of Trend and end use methods seems to have been employed. The
assumptions and justifications have not been given in the SEP nor is the CEA
FORECASTING REPORT been enclosed. The earlier Forecasts of DISCOMs in
ARRs over the years using trend methods has not matched with actual even
after APERC has approved after tempering the optimistic claims of the DISCOMs
B. No Review of 4^^ C.P. has been done or reported in the SEC .Review of
previous performance is the first step before the next period forecast. We regret
to say that, without a previous period review, the Value of the SEP diminishes &
is even questionable.
C. CAGR for growth is in our opinion too optimistic and we note with regret that
for a business plan for a CAPEX of Rs 122515 CRORES, NO SENSITIVITY
analysis has been shown In THE SEP. we are sure this honorable commission
will subject this SEP to this SENSITIVITY ANALYSIS RIGOR besides other
Statistical tools for evaluation.
D. We note that that no new generation capacity is planned for 6™ C.P. and
there is deficit all through .We as consumers are disappointed that no “ PLAN OF
ACTION “ is mentioned for mitigation for the most vital wheel of economic
growth “ energy “
e. The cushion to additional capacity to transmit & distribute energy both in terms
of MU & MW at the end of 5th C.P and 6*^ C.P is not explained & documented in
an understandable manner in the S.E.P.
OUR PRAYERS
We humbly submit the following prayers to the Honorable Commission to
consider
1. We pray that the commission would conduct a PUBLIC HEARING" on
these RESOURCE PLAN submissions of APTRANSCO & APDiSCOMs.
The CAPEX involved is Rs.1, 22,515 crores and WE SUBMIT AND PRAY
that a Public hearing involving a wide cross section of consumers will
be in the larger public interest.
2. We request the Honorable Commission to direct the DISCOMS to respond to
our queries.
BIoUWTURJo
4i#'
3. We further submit that a review of 4'^ C.P be provided by the
APSTRANCO/C.P.
4. Since the investments are very large and having implications for we paying
consumers, we request this honorable commission to conduct a review after
every two years for any course correction in plans.
5. We once again pray that the commission SUOMOTU if necessary, as
DISCOMs have not as yet filed any petition, to update APGENCO TARIFF
regulations of 2008 in line with CERC Regulations 2019.
6. We request the honorable commission to direct APTRANSCO/DISCOMS to
confirm Transmission and Distribution capacity available in MU & MW
TERMS, inclusive of peak load capacity at the end of each control period.
7. We request that we be allowed to make any additional submissions and an
opportunity to make our submissions in person.
Yours Sincerely,
Secretary,
AP Textile Mills Association
14