THE
JHARKHAND GAZETTE
EXTRAORDINARY
PUBLISHED BY AUTHORITY
21 Kartik, 1942 (S)
Ranchi, Thursday, 12th November, 2020
JHARKHAND STATE ELECTRICITY REGULATORY
COMMISSION, RANCHI
JSERC (Terms and Conditions for Determination of Distribution Tariff)
Regulations, 2020
No. 75 --In exercise of powers conferred by sub-section (1) of Section 181 and clauses (zd),
(ze) and (zf) of sub-section (2) of Section 181, read with Sections 61, 62, and 86, of the
Electricity Act, 2003 (36 of 2003) and all other powers enabling it in that behalf, the
Jharkhand State Electricity Regulatory Commission hereby makes the following Regulations.
A Regulation guided by the principles contained in Sections 61 and 62 of the Act to
encourage competition, efficiency, economical use of resources, good performance and
optimum investments by the Distribution Licensees within the State of Jharkhand and for
determination of Multi-Year Tariff to be recovered by the Distribution Licensees for the
prudent expenses incurred towards providing quality supply to consumers within the State of
Jharkhand.
No. 570
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CHAPTER I:
SCOPE, EXTENT AND DEFINITIONS
A 1. Short Title and Commencement
1.1
These Regulations shall be called the Jharkhand State Electricity Regulatory
Commission (Terms and Conditions for Determination of Distribution Tariff)
Regulations, 2020.
1.2
These Regulations shall extend to the whole of the State of Jharkhand.
1.3
These Regulations shall come into force for the period from April 01, 2021 to March
31, 2026, after its publication in the Official Gazette of the Government of Jharkhand
and unless reviewed earlier or extended by the Commission, shall remain in force
upto March 31, 2026.
1.4
These Regulations shall supersede the Jharkhand State Electricity Regulatory
Commission (Terms and Conditions for Determination of Distribution Tariff)
Regulations, 2015,Jharkhand State Electricity Regulatory Commission (Terms and
Conditions for Determination of Distribution Tariff) Regulations, 2010, Jharkhand
State Electricity Regulatory Commission (Terms and Conditions of Tariff
determination, Multi-Year Tariff Framework) Regulations, 2007,and Jharkhand State
Electricity Regulatory Commission (Terms and Conditions for Distribution Tariff)
Regulations, 2004, read with all amendments thereto, as the case may be:
Explanation : For all purposes, including review matters pertaining to the period till
March 31, 2021, the issues relating to determination of Aggregate Revenue
Requirement and Tariff shall be governed by the provisions of the Jharkhand State
Electricity Regulatory Commission (Terms and Conditions for Determination of
Distribution Tariff) Regulations, 2015 or Jharkhand State Electricity Regulatory
Commission (Terms and Conditions for Determination of Distribution Tariff)
Regulations, 2010 or Jharkhand State Electricity Regulatory Commission (Terms and
Conditions of Tariff determination, Multi-Year Tariff Framework) Regulations, 2007
or Jharkhand State Electricity Regulatory Commission (Terms and Conditions for
Distribution Tariff) Regulations, 2004, read with all amendments thereto, as may be
applicable.
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A 2. Scope of Regulations and Extent of Application
2.1
These Regulations shall be applicable for determination of ARR and Tariff to be
billed by the Distribution Licensees for Wheeling and Retail Supply Businesses to the
different categories of consumers including other Distribution Licensees within the
State of Jharkhand.
2.2
In accordance with the principles laid out in these Regulations, the Commission shall
determine tariff for:
a)
Wheeling of electricity, i.e., wheeling tariff for the Control Period, and;
b)
Retail Supply of electricity, i.e., retail supply tariff for the Control Period:
Provided that in case of distribution of electricity in the same area by two or more
Licensees, the Commission may, for promoting competition among Licensees, fix
only maximum ceiling of tariff for retail supply of electricity:
Provided further that where any category of consumer has been permitted open access
under Section 42 of the Act, the Commission shall determine the wheeling tariff,
cross-subsidy surcharge, additional surcharge and other open access related charges in
accordance with these Regulations and JSERC (Intra State Open Access) Regulations,
2016, as amended from time to time.
2.3
The ARR determined for the Wheeling Business shall be used to fix wheeling tariff
for wheeling of electricity.
2.4
The ARR determined for Retail Supply Business shall be used to fix retail supply
tariff for retail sale of electricity.
2.5
These Regulations shall extend to the entire State of Jharkhand and to all matters
within the jurisdiction of the Commission.
A 3. Definitions and Interpretation
3.1
In these Regulations, unless the context otherwise requires-
1.
‘Accounting Statement’ means for each Financial Year:
i. The Balance Sheet, prepared in accordance with the form contained in the
Companies Act, 2013 and its predecessors, as applicable;
ii. Cash Flow Statement, prepared in accordance with the applicable
Accounting Standards of the Institute of Chartered Accountants of India;
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iii. Cost Accounting Records prescribed by the Central Government under
Section 148 of the Companies Act, 2013 and its predecessors, as
applicable;
iv. Notes on accounts thereto, and such other supporting statements and
information forming part of financial statements or as the Commission
may direct from time to time;
v. Profit and Loss Account, complying with the requirements contained in
The Companies Act, 2013 and its predecessors, as applicable;
vi. Report of the Statutory Auditors, including any annexure and appendix
thereto, as applicable;
vii. Any or all the formats as notified by the Commission under these
Regulations for Tariff Regulation including Multi Year Tariff Regulations
pertinent to the relevant year;
viii. Reconciliation Statement, duly certified by the Statutory Auditors,
showing the reconciliation between the total expenses, revenue, assets and
liabilities, of the entity as a Company and the expenses, revenue, assets
and liabilities, separately for each Business regulated by the Commission
and unregulated business operations.
2.
‘Act’ means the Electricity Act, 2003 (36 of 2003) and subsequent
amendments thereof;
3.
‘Additional Capitalisation’ means the capital expenditure incurred and
capitalised or projected to be capitalised, after the date of commercial
operation of the scheme and admitted by the Commission after prudence
check, subject to provisions of Clause 10.13 of these Regulations;
4.
‘Aggregate Revenue Requirement’ or ‘ARR’ means application for each
financial year, the costs pertaining to the Licensed business which are
admissible, in accordance with these Regulations, to be recovered in the form
of tariffs and charges determined by the Commission;
5.
‘Allocation Statement’ means for each financial year, a statement in respect
of each of the businesses (Wheeling, Retail Supply, Other Business) of the
Licensee, showing the amounts of any revenue, cost, asset, liability, reserve or
provision, etc., which has been either:
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(i)
Determined by apportionment or allocation between different
businesses of the Licensee including the Licensed Business, together
with a description of the basis of the apportionment or allocation; or
(ii)
Charged from or to each such Other Business together with a
description of the basis of that charge;
6.
‘Auditor’ means an auditor appointed by the Distribution Licensee, in
accordance with the provisions of the Companies Act, 2013, as amended from
time to time, or any other law for the time being in force;
7.
‘Bank Rate’ means the one-year Marginal Cost of Lending Rate (MCLR) of
the State Bank of India from time to time or any replacement thereof for the
time being in effect;
8.
‘Base Year’ means the Financial Year 2020-21 and used for the purposes of
these Regulations;
9.
‘Collection Efficiency’ shall mean the ratio of total revenue realised to total
revenue billed for the same financial year;
10.
‘Commission’ means the Jharkhand State Electricity Regulatory Commission
(JSERC);
11.
‘Conduct of Business Regulations’ means the JSERC (Conduct of Business)
Regulations,2016, as amended from time to time;
12.
‘Control Period’ means a multi-year period fixed by the Commission, from
April 01, 2021 and up to March 31, 2026;
13.
‘Deemed Distribution Licensee’ means a person/entity deemed to be a
Distribution Licensee under Section 14 of the Act;
14.
‘Distribution Licensee’ means a Licensee authorised to operate and maintain
a distribution system for supplying electricity to consumers in its area of
supply under Section 14 of the Act;
15.
‘Financial Year’ means a period commencing on April 01 of a calendar year
and ending on March 31 of the subsequent calendar year;
16.
‘Force Majeure Event’ means, with respect to any party, any event or
circumstance, or combination of events or circumstances, which is not within
the reasonable control of, and is not due to an act of omission or commission
of that party and which, by the exercise of reasonable care and diligence,
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could not have been prevented; and, without limiting the generality of the
foregoing, shall include the following events or circumstances:
(i)
acts of God, including but not limited to lightning, storm, action of
the elements, earthquakes, flood, torrential rains, drought and natural
disaster or any act of God beyond the control of any party or due to
any restraint of the State Government or Central Government or any
other Statutory Authority;
(ii)
strikes and industrial disturbances having a State-wide or extensive
impact in the area of supply of a Licensee, but excluding strikes and
industrial disturbances in the Distribution Licensee's own
organisation;
(iii)
acts of war, invasion, armed conflict or act of foreign enemy,
insurrections, riots, revolution, terrorist or military action;
(iv)
unavoidable accident, including but not limited to fire, explosion,
radioactive contamination and toxic chemical contamination;
(v)
any shutdown or interruption of the grid, which is required or
directed by the concerned Load Despatch Centre;
17.
‘Income from Other Business’ is the income received by the Distribution
Licensee other than from Tariff towards usage of assets and/or manpower
relating to regulated Business and shall exclude Non-Tariff Income;
18.
‘Licence’ means a Distribution Licence granted under Section 14 of the Act;
19.
‘Licensed Business’ shall mean the functions and activities, which the
Licensee is required to undertake in terms of the Licence granted or being a
deemed Licensee under the Act;
20.
‘Non-Tariff Income’ means the net income relating to the regulated Business
other than from Tariff, excluding any income from Other Business and, in case
of the Retail Supply Business of a Distribution Licensee, excluding income
from receipts on account of cross-subsidy surcharge and additional surcharge
and Other Business;
21.
‘Open Access Consumer’ means any Licensee or Consumer or buyer or a
person engaged in generation who has been granted Open Access in
accordance with the JSERC (Terms and Conditions for Intra-State Open
Access) Regulations, 2016 as amended from time to time;
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22.
‘Other Business’ means any other business of the Distribution Licensee for
optimum utilisation of its assets within the meaning of Section 51 of the Act;
23.
‘Prudence Check’ means scrutiny of reasonableness of any cost or
expenditure incurred or proposed to be incurred in accordance with these
Regulations by the Distribution Licensee;
24.
‘Retail Supply Business’ means the business of sale of electricity by a
Licensee to the category of consumers within the area of supply in accordance
with the terms of the Licence for distribution and retail supply of electricity;
25.
‘Retail Supply Tariff’ is the rate charged by the Licensee for supply to non-
open access consumers, which includes charges for Wheeling and Retail
Supply;
26.
‘Trading Business’ means the business of purchase of electricity by the
Licensee for resale to another Licensee or consumers or category of
consumers outside the area of supply of the Licensee;
27.
‘Tariff Period’ shall mean the period from April01, 2021 and up to
March 31, 2026 for which Tariff is determined by the Commission under these
Regulations;
28.
‘Wheeling’ means the operation whereby the distribution system and
associated facilities of a Licensee, are used by another person for the
conveyance of electricity on payment of charges to be determined under
Section 62 of the Act;
29.
‘Wheeling Business’ means the business of operating and maintaining a
distribution system for conveyance of electricity in the area of supply of the
Licensee.
3.2
Words and expressions used in these Regulations and not defined herein but defined
in the Act shall have the meanings respectively assigned to them in the Act.
3.3
Reference to any Act, Rules and Regulations shall include amendment or
consolidation or re-enactment thereof.
3.4
All proceedings under these Regulations shall be governed by the JSERC (Conduct of
Business) Regulations, 2016 as amended or re-enacted from time to time.
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A 4. Tariff Approved to be Ceiling Tariff
4.1
For removal of doubts, it is clarified that the Tariffs determined under the provisions
of these Regulations are the ceiling values and this shall not preclude the Distribution
Licensee from proposing reduced Tariffs for any consumer and insuch case the
reduced Tariffs shall be not be considered for the determination of Revenue as the
same is the liability of the Distribution Licensee.
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CHAPTER II:
TARIFF FRAMEWORK AND GUIDING PRINCIPLES
A 5. MYT Framework
5.1
The MYT Framework shall commence from April 01, 2021 and unless reviewed
earlier or extended by the Commission, shall be applicable till March 31, 2026. The
ARR filings for the Control Period shall be done in accordance with the MYT
framework contained in these Regulations.
5.2
The Distribution Licensees shall file MYT Application along with supporting
documents before the Commission as per the timelines specified in Section A 24 of
these Regulations.
5.3
The MYT Application shall include statements containing ARR along with its break
up for the Years of the previous Control Period based on Audited Accounts for FY
2015-16 to FY 2019-20, revised estimates for Base Year FY 2020-21, and the
projections for each year of the Control Period.
5.4
The Guiding Principles for MYT Framework are described in Section A 6 of these
Regulations.
5.5
The principles for determination of ARR for the Control Period are described in
Chapter III of these Regulations and the procedure for Annual Filing during the
Control Period is described in Chapter IV of these Regulations.
A 6. Guiding Principles for MYT Framework
6.1
The Commission shall adopt Multi Year Tariff Framework for approval of ARR and
expected revenue from Wheeling and Retail Supply Tariffs approved. The ARR shall
be determined for each year of the Control Period.
6.2
The Multi Year Tariff framework shall be based on the following:
a)
Business Plan for the Wheeling and the Retail Supply Businessof the
Licensees for the entire Control Period to be filed before the Commission for
approval, along with MYT Petition prior to the start of the Control Period or
within such period as the Commission may direct;
b)
Licensees’ forecast of expected ARR for each year of the Control Period,
wheeling tariff and retail supply tariff for the first year of the ensuing Control
Period, based on reasonable assumptions of the underlying financial and
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operational principles/parameters laid down under these Regulations, and on
the basis of the Business Plan;
c)
Trajectory for specific parameters shall be prescribed by the Commission for
improvement of Licensee’s performance through incentives and disincentives;
d)
Annual review of performance, which shall be conducted vis-à-vis the
approved forecast and categorization of variations in performance into
controllable and uncontrollable factors; and
e)
Mechanism for sharing approved gains or losses on account of controllable
and uncontrollable factors.
Determination of Baseline
6.3
The values for the Base Year of the Control Period shall be determined on the basis of
the audited accounts available for FY 2015-16 to FY 2019-20. In the absence of
audited accounts of any such year, the Commission may consider best estimate for
such year after carrying out due prudence check and after taking into account other
factors as considered relevant by the Commission.
6.4
The Commission shall normally not revise the performance targets during the Control
Period, unless the Commission is of the view that there is a major variation in
approved numbers vis-a-vis actuals.
Segregation of Retail Supply and Wheeling Business
6.5
The Licensee shall segregate the accounts of the Licensed Business into Wheeling
Business and Retail Supply Business.
6.6
The ARR for Wheeling Business shall be used to determine Wheeling Tariff and the
ARR for Retail Supply Business shall be used to determine Retail Supply Tariff.
6.7
For such period until accounts are segregated, the Licensee shall prepare an
Allocation Statement to apportion costs and revenues to respective business. The
Allocation Statement, approved by the Board of Directors of the Licensee, shall be
accompanied with an explanation of the basis and methodology used for segregation,
which should be consistent over the Control Period.
6.8
In case clear and reasoned methodology for allocation is not submitted by the
Distribution Licensee, the Commission may consider the segregation as approved for
the previous Control Period as specified below or may decide on the manner in which
such allocation can be done:
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Particulars
Share of
Supply
Business
Share of
Wires
Business
O&M Cost
Employee cost
40%
60%
A&G Expense
50%
50%
R&M Cost
10%
90%
Power purchase (Including PGCIL & RLDC Charges)
100%
0%
Interest on security deposit
100%
0%
Interest Cost
10%
90%
Interest on working capital
90%
10%
Taxes on Income
10%
90%
Depreciation
10%
90%
Return on Equity
10%
90%
Less: Non-Tariff/OtherIncome
90%
10%
Business Plan
6.9
Each Licensee shall file for the Commission’s approval a Business Plan approved by
an authorized signatory, as per the timelines specified in Section A 24of these
Regulations.
6.10
The Business Plan shall be filed separately for the Retail Supply and Wheeling
Business. As specified in Clause 6.7 of these Regulations, in the absence of
segregated accounts for the two Businesses, the Licensee shall prepare an allocation
statement and submit the same with the Business Plan.
6.11
The Business Plan shall be for the entire Control Period and shall inter-alia contain:
a)
Capital Investment Plan for the entire Control Period commensurate with
load growth, distribution loss reduction trajectory and quality improvement
measures proposed in the Business Plan. The Capital Investment Plan should
also include corresponding capitalisation schedule and financing plan;
The Distribution Licensee shall also submit scheme-wise capital structure and
cost of financing (interest on debt) and return on equity, Grant, Deposit Works
along with terms of the existing loan agreements, etc., as a part of Capital
Investment Plan;
b)
Sales/Demand Forecast for each consumer category and sub-categories for
each year of the Control Period;
c)
Power Procurement Plan based on the sales forecast and distribution loss
trajectory for each year of the Control Period. The Power Procurement Plan
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shall also include energy efficiency, RPO fulfilment, and demand side
management measures;
d)
A setof targets proposed for other controllable items such as distribution
losses, collection efficiency, working capital requirement, quality of
supply targets (viz., SAIFI, SAIDI and MAIFI as per the JSERC
(Distribution Licensees’ Standards of Performance) Regulations, 2015, and
subsequent amendments), etc. The targets shall be consistent with the capital
investment plan proposed by the Licensee;
e)
Human Resource Plan with manpower planning including details of the
estimated year wise manpower addition and retirements for the Control Period
to meet the growth in demand/consumers;
f)
Proposals for Non-Tariff Income with item-wise description and details;
g)
Proposals in respect of income from Other Business; and
h)
Business Plan shall also contain the requisite information for the preceding
Control Period:
Provided that requisite information for the preceding Control Period shall
include year-wise audited data on Scheme-wise capital investment,
distribution loss trajectory, quality improvement measures undertaken,
category-wise number of consumers, connected load and sales, source-wise
power procurement quantum and cost, Employee, R&M and A&G Expenses
along with detailed break up and any other information used for preparing
projections of various performance parameters and other components during
the Control Period. In case of a new Licensee, such information is required to
be submitted for the period of operations up to the start of the Control Period.
Capital Investment Plan
6.12
The Licensee shall file for the Commission’s approval a Capital Investment Plan for
the entire Control Period along with the Business Plan. The Capital Investment Plan
shall be prepared scheme-wise and each scheme shall include:
a)
Purpose of investment (e.g., replacement of existing assets, meeting load
growth, technical and distribution loss reduction, non-technical loss reduction,
meeting reactive energy requirements, customer service improvement,
improvement in quality and reliability of supply, etc.);
b)
Approval of Competent Authority;
c)
Capital Structure;
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d)
Detailed Project Report;
e)
Capitalization Schedule;
f)
Implementation schedule including timelines;
g)
Cost-benefit analysis and Rate reasonability;
h)
Improvement in operational efficiency envisaged in the Control Period;
i)
Ongoing schemes that will spill over into the year under review along with
justification;
j)
New schemes that will commence during the Control Period but may be
completed within or beyond the Control Period.
6.13
During the Annual Performance Review, the Commission shall monitor the year-wise
progress of the actual capital expenditure incurred by the Licensee vis-à-vis the
approved capital expenditure. The Licensee shall submit the actual capital expenditure
incurred along with the Annual Performance Review Filing.
6.14
The Commission shall review the actual capitalisation at the end of each year of the
Control Period vis-à-vis the approved capitalisation schedule and shall true up the
ARR based on actual capitalisation for the year for which True up has been filed and
also revise the ARR components for the year for which APR and Tariff have been
sought.
6.15
In case the capital expenditure is required for emergency work, which has not been
approved in the Capital Investment Plan, the Licensee shall submit an application
containing all relevant information along with reasons justifying emergency nature of
the proposed work seeking approval of the Commission wherever possible:
Provided that in case the capital expenditure is required for emergency work or
unforeseen situation to mitigate threat to life and property and if prior intimation
thereof to the Commission shall cause any irreparable loss or injury, the Licensee may
undertake such capital expenditure and submit the details for post-facto approval of
the Commission along with next Tariff Petition with all relevant details.
Sales/DemandForecast
6.16
The Licensee, in its Business Plan filings, shall forecast sales for each consumer
category, sub-category and for each tariff slab, at different voltage levels, for each
year of the Control Period based on recent trends and historical growth for the
Commission’s review and approval along with the requisite details of category-wise
and voltage-wise sales, contracted load, number of consumers, etc.
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6.17
The Commission shall examine the forecasts for reasonableness and consistency on
the basis of expected growth in the number of consumers, changes in pattern of
consumption, seasonal variations, target distribution losses, demand for electricity in
previous years and anticipated growth in the next year, and any other factor
considered relevant by the Commission, and accordingly approve sales forecast with
such modifications as deemed fit for each year of the Control Period.
6.18
Sales of electricity, if any, to electricity traders or another Licensee shall be separately
indicated.
6.19
The Licensee shall also indicate category-wise open access consumers along with
open access sales. The energy wheeled for them shall be shown separately for:
a)
Supply within its area of supply; and
b)
Supply outside its area of supply.
Power Procurement Guidelines
6.20
The Distribution Licensee shall undertake its Power procurement during the year in
accordance with the Power Procurement Plan for the Control Period, which may
include long-term, medium-term and short-term power procurement, approved by the
Commission in accordance with these Regulations.
6.21
The Distribution Licensee shall follow the Guidelines contained in this Part with
respect to:
a)
Procurement of power under any arrangement or agreement with a term or
duration exceeding 12 years and upto 25 years (i.e., long-term power
procurement);
b)
Procurement of power under any arrangement or agreement with a term or
duration exceeding 3 months but not exceeding 3 years (i.e., medium-term
power procurement); and
c)
Procurement of power under any arrangement or agreement with a term or
duration less than or equal to 1 month (i.e., short-term power procurement).
Power Procurement Plan
6.22
The Distribution Licensee shall prepare a plan for procurement of power to serve the
demand for electricity in its area of supply and submit such plan to the Commission
for approval:
Provided that such power procurement plan shall be submitted for the Control Period
from FY 2021-22 to FY 2025-26:
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Provided further that the power procurement plan proposed as a part of the Business
Plan, shall be submitted along with the application for determination of tariff:
Provided also that the power procurement plan submitted by the Distribution Licensee
may include purchase from long-term, medium-term and short-term sources of power,
in accordance with these Regulations. However, the Distribution Licensee should as
far as possible, not plan for short-term purchases except for conditions specified in
Clause6.31 to Clause 6.36and should endeavour to meet its requirement from long-
term and medium-term power procurement and make a plan accordingly.
6.23
The power procurement plan of the Distribution Licensee shall comprise the
following:
a)
A quantitative forecast of the unrestricted demand for electricity for each tariff
category, within its area of supply over the Control Period;
b)
An estimate of the quantities of electricity supply from the identified sources
of generation and power purchase;
c)
An estimate of availability of power to meet the Base Load and Peak Load
requirement:
Provided that such estimate shall be monthly estimation of demand and supply
expressed both in Mega-Watt (MW) as well as in Million Units (MU);
d)
Standards to be maintained with regard to quality and reliability of supply, in
accordance with theJharkhand State Electricity Regulatory Commission
(Distribution Licensees’ Standards of Performance) Regulations, 2015, as
amended from time to time;
e)
Measures proposed to be implemented as regards energy conservation and
energy efficiency;
f)
The requirement for new sources of power generation and/or procurement,
including augmentation of generation capacity and identified new sources of
supply, based on (a) to (e) above;
g)
The plan for procurement of power including quantities and cost estimates for
such procurement:
Provided that the forecast/estimate contained in the long-term procurement
plan shall be separately stated for peak and off-peak periods, in terms of
quantities of power to be procured (in MU) and maximum demand (in MW /
MVA):
Provided further that the forecasts/ estimates shall be prepared for each month
of the Control Period:
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Provided also that the long-term procurement plan shall be a cost-effective
plan based on available information regarding costs of various sources of
supply.
6.24
The forecasts estimates shall be prepared using forecasting techniques based on past
data and reasonable assumptions regarding the future:
Provided that the forecasts/estimates shall take into account factors such as overall
economic growth, consumption growth of electricity-intensive sectors, advent of
competition in the electricity industry, trends in captive power, impact of loss
reduction initiatives, improvement in Generating Station Plant Load Factors and other
relevant factors.
6.25
Where the Commission has stipulated a percentage of the total consumption of
electricity in the area of a Distribution Licensee to be purchased from co-generation/
renewable sources of energy, the power procurement plan of such Distribution
Licensee shall include the plan for procurement from such sources atleast upto the
stipulated level.
6.26
The Distribution Licensee shall be required to forward a copy of the power
procurement plan to the State Transmission Utility for verification of its consistency
with the transmission system plan for the intra-State transmission system:
Provided that the Distribution Licensee may also consult the State Transmission
Utility at the time of preparation of the power procurement plan to ensure consistency
of such plan with the transmission system plan.
6.27
The Distribution Licensee may, as a result of additional information not previously
known or available at the time of submission of the power procurement plan, apply
for a modification in the power procurement plan for the remainder of the Control
Period, as part of the application for Annual Performance Review.
6.28
The Commission may, as a result of additional information not previously known or
available to the Commission at the time of submission of the power procurement plan,
if it so deems, either on suo-motu basis or on an application made by any interested or
affected party, modify the power procurement plan of the Distribution Licensee for
the remainder of the Control Period, as part of the Annual Performance Review.
Approval of power purchase agreement/arrangement
6.29
Every agreement or arrangement for power procurement by a Distribution Licensee
from a Generating Company or Licensee or from other source of supply entered into
shall come into effect only with the prior approval of the Commission:
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Provided that the prior approval of the Commission shall be required in respect of any
agreement or arrangement for power procurement by the Distribution Licensee from a
Generating Company or Licensee or from any other source of supply on a standby
basis:
Provided further that the prior approval of the Commission shall be required for any
change to an existing arrangement or agreement for power procurement, whether or
not such existing arrangement or agreement was approved by the Commission.
6.30
The Commission shall review an application for approval of power procurement
agreement/arrangement having regard to the approved power procurement plan of the
Distribution Licensee and the following factors:
a)
Requirement for power procurement under the approved power procurement
plan;
b)
Adherence to a transparent process of bidding in accordance with guidelines
issued by the Central Government;
c)
Adherence to the terms and conditions for determination of tariff specified
under these Regulations where the process specified in (b) above has not been
adopted;
d)
Availability (or expected availability) of capacity in the intra-State
transmission system for evacuation and supply of power procured under the
agreement/ arrangement;
e)
Need to promote co-generation and generation of electricity from renewable
sources of energy.
Additional Short-term power procurement
6.31
The Distribution Licensee may undertake additional short-term power procurement
during the year, over and above the power procurement plan for the Control Period
approved by the Commission, in accordance with this Regulation.
6.32
Where there has been a shortfall or failure in the supply of electricity from any
approved source of supply during the Financial Year, the Distribution Licensee may
enter into additional short-term arrangement or agreement for procurement of power:
Provided that if the total power purchase cost or quantum for any block of six months
including such short-term power procurement exceeds the power purchase cost or
quantum approved by the Commission for the respective block of six months by more
than 10%, the Distribution Licensee shall have to obtain prior approval of the
Commission.
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6.33
Where the Distribution Licensee has identified a new short-term source of supply
from which power can be procured at a tariff that reduces its approved total power
procurement cost, the Distribution Licensee may enter into a short-term power
procurement agreement or arrangement with such supplier without the prior approval
of the Commission.
6.34
The Distribution Licensee may enter into a short-term arrangement or agreement for
procurement of power or procure power from Power Exchanges without the prior
approval of the Commission when faced with emergency conditions that threaten the
stability of the distribution system or when directed to do so by the State Load
Despatch Centre to prevent grid failure.
6.35
Within fifteen (15) days from the date of entering into an agreement or arrangement
for short-term power procurement for which prior approval is not required, the
Distribution Licensee shall provide the Commission, full details of such agreement or
arrangement, including quantum, tariff calculations, duration, supplier details, method
for supplier selection and such other details as the Commission may require with
regard to such agreement/arrangement to assess that the conditions specified in this
Regulation have been complied with:
Provided that where the Commission has reasonable grounds to believe that the
arrangement or agreement entered into by the Distribution Licensee does not meet the
criteria specified in Clause 6.32 to Clause 6.34, the Commission may disallow any
increase in the total cost of power procurement (net of additional revenue) over the
approved level arising there from or any loss incurred by the Distribution Licensee as
a result, from being passed through to consumers.
6.36
Subject to the cases specified in Clause 6.32 to Clause 6.34, where the Distribution
Licensee enters into any agreement or arrangement for short-term power procurement
without the approval of the Commission, any increase in the total cost of power
procurement (net of additional revenue) over the approved level arising there from
shall be deemed to be a variation in performance attributable entirely to controllable
factors.
6.37
In addition, the Licensee may also sell any surplus power in the open market provided
that such sale of power shall lead to recovery of tariff higher than the variable cost of
such power.
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Targets for Distribution Losses and Collection Efficiency
6.38
The Licensee shall file the distribution loss trajectory for the entire Control Period in
the Business Plan commensurate with the Capital Investment Plan for each year of the
Control Period for approval of the Commission.
6.39
The minimum collection efficiency targets to be met during the Tariff Period by
various Licensees are as follows:
Collection Efficiency Targets
Utility
2021-22
2022-23
2023-24
2024-25
2025-26
JBVNL
99.00%
99.00%
99.00%
99.00%
99.00%
JUSCO
99.50%
99.50%
99.50%
99.50%
99.50%
SAIL-Bokaro
99.50%
99.50%
99.50%
99.50%
99.50%
TSL
99.50%
99.50%
99.50%
99.50%
99.50%
DVC
99.50%
99.50%
99.50%
99.50%
99.50%
Provided that in case the actual collection efficiency is greater than the target, the
actual collection efficiency shall be considered for Tariff Determination purposes.
Quality of Supply and Services
6.40
The quality of supply and the customer service parameters shall be monitored as per
the norms specified by the Commission from time to time.
6.41
The Licensees shall propose the baseline and performance trajectory for all quality
parameters as specified in the JSERC (Distribution Licensees’ Standards of
Performance) Regulations, 2015, as amended from time to time as per the formats
specified in the said Regulations. For the Control Period, the proposed baseline and
performance trajectory shall be submitted along with the Business Plan.
6.42
The Commission shall make an assessment of reliability of baseline data and may
prescribe the performance trajectory for each identified parameter for the Control
Period.
6.43
The performance framework to encourage Licensees to improve quality of supply and
services shall be as per the JSERC (Distribution Licensees’ Standards of
Performance) Regulations, 2015, as amended from time to time.
Controllable and Uncontrollable elements of ARR
6.44
For the purpose of the MYT Framework contained in these Regulations, the elements
of ARR shall be identified as “controllable” and “uncontrollable”, as follows:
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ARR Element
Controllable/Uncontrollable
Sales
Uncontrollable
Power Purchase Cost (excluding short-term power)
Uncontrollable
Short-Term Power Purchase Cost
Controllable (Ceiling Value)
Transmission & Load Despatch Charges
Uncontrollable
O&M
Expenses
(excluding
terminal
liabilities
of
employees)
Controllable
Terminal liabilities of employees
Uncontrollable
Return on Equity
Controllable
Interest on Loan
Controllable
Interest on Working Capital
Controllable
Depreciation
Controllable
Taxes on Income
Uncontrollable
Foreign Exchange Rate Variation
Uncontrollable
Non-Tariff Income
Uncontrollable
Income from Other Businesses
Uncontrollable
Interest on Consumer Security Deposit
Uncontrollable
Distribution Loss and Collection Efficiency
Controllable
Quality of Supply
Controllable
Capital Expenditure
Controllable
Capitalisation
Controllable
Variation in Wires Availability and Supply Availability
Controllable
6.45
The variation on account of uncontrollable elements shall be treated as a pass through
to be ultimately charged to the consumers, subject to prudence check and approval by
the Commission.
6.46
The Commission shall also permit pass-through of variations in controllable items on
account of Force Majeure events and due to Change in Law in the ARR for the
ensuing year, based on the submission of actual values by the Licensee and
subsequent validation and approval by the Commission.
6.47
The variation from targets specified by the Commission on account of controllable
elements shall be subject to incentive and penalty framework, as detailed in the
subsequent section.
Incentive and Penalty Framework
6.48
Various elements of the ARR of the Licensee will be subject to incentive and penalty
framework as per the terms specified in this section. The overall aim shall be to
incentivise better performance and penalise poor performance, compared to the
performance norms/benchmarks specified by the Commission.
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6.49
The gains/losses shall be computed on aggregate basis for controllable items such as
Operation & Maintenance Expenses (excluding Terminal Liabilities), Distribution
Losses and Collection Efficiency considered collectively on annual basis. The
computations shall be based on the data submitted by the Licensee in the Annual
Performance Review and audited annual accounts and shall be subject to prudence
check by the Commission.
6.50
In case of aggregate gains, the aggregate gain shall be shared between the Licensee
and the consumers in the ratio of 50:50 respectively.
6.51
The gains to be shared shall be passed on to the consumers through Tariff during the
Annual Performance Review for each year of the Control Period.
6.52
In case of any loss on account of underperformance with respect to the controllable
parameters, the Licensee shall bear the entire losses and no proportion of losses shall
be passed on to the consumers.
6.53
In addition, the net savings due to refinancing of Loans by the Distribution Licensee
shall be shared between the Users and the Licensee, as the case may be, in the ratio of
50:50.
A 7. Truing-up
7.1
The Licensee shall submit along with the application for truing up, category-wise and
voltage-wise sales, contracted demand and number of consumers, source-wise power
purchase quantum and cost, details of capital expenditure, additional capitalization,
sources of financing, operation and maintenance expenditure, actual loan portfolio
with the interest paid along with other components of ARR, for each year of the
Control Period, on the basis of annual Audited Accounts as per the Timelines
stipulated in Section A 24.
7.2
Where after the truing up, the revenue recovered exceeds the trued up value approved
by the Commission under these Regulations, the surplus amount shall be treated as
specified in Clause 7.4 of these Regulations.
7.3
Where after the truing up, the revenue recovered is less than the trued up value
approved by the Commission under these Regulations, the gap amount shall be treated
as specified in Clause 7.4 of these Regulations.
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7.4
The amount under-recovered or over-recovered, along with simple interest at the rate
equal to Bank Rate as on April 01 of the respective year plus 350 basis points, shall be
carried forward to the Tariff approved for the subsequent years:
Provided that no carrying cost on the duration of delay shall be allowed on
unrecovered gap if the Licensee fails to submit the Petitions as per the timelines
stipulated in Section A 24:
Provided further that if such gap is large, and it is not feasible to recover the
same in one year alone, the Commission may take a view to create a regulatory asset,
as per the guidelines provided in Clause 8.2.2 of the Tariff Policy, 2016:
Provided further that any adverse financial impact on account of variation in
uncontrollable items due to lapse on part of the Licensee or its suppliers/contractors
shall not be allowed in truing up.
7.5
The Commission, to ensure tariff stability, may include the trued-up costs in the
subsequent Control Period’s ARR instead of including in the year succeeding the
relevant year of the Control Period.
A 8. Annual Performance Review
8.1
The Licensee shall submit along with the application for Annual Performance
Review, details of category-wise and voltage-wise sales, contracted demand and
number of consumers, source-wise power purchase quantum and cost, details of
capital expenditure, additional capitalization, sources of financing, operation and
maintenance expenditure, actual loan portfolio with the interest paid along with other
components of ARR incurred/projected to be incurred for the year under review, as
per the timelines stipulated in Section A 24.
8.2
Along with Annual Performance Review Filing, the Licensee shall also claim revised
ARR for the following year based on the truing up and annual performance review of
previous year/s.
8.3
The Scope of the Annual Performance Review shall be comparison of the approved
expenses vis-à-vis revised estimates for the year(s)and shall comprise the following:
a)
Comparison of Approved Capital Expenditure and Capitalisation vis-à-vis
revised estimates by the Licensee based on the latest actual data available;
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b)
Comparison of Sales and Power Purchase required to meet the requisite Sales
approved by the Commission vis-à-vis the revised estimates by the Licensee
based on the latest actual data available;
c)
Comparison of Other Expenses such as Interest on Loan, Interest on Working
Capital, Return on Equity, Depreciation and O&M Expenses approved by the
Commission vis-à-vis the revised estimates by the Licensee based on the latest
actual data available;
d)
Computation of the sharing of gains and losses on account of controllable
factors for the previous year;
e)
Approved Revenue vis-à-vis revised estimates based on the latest actual data
available.
f)
Any other Expenses/Revenues impacting ARR.
8.4
Distribution Licensees may, as a result of additional information not previously
known or available to them at the time the forecast was developed, apply for a
modification in the approved forecast of ARR and expected revenue from tariff and
charges for the remainder of the Control Period, as part of the Annual Performance
Review.
8.5
The Commission if, as a result of additional information not previously known or
available to it at the time the forecast was developed, is of the view that the same may
result in significant over/under recovery, either suo-motu or on an application made
by any interested or affected party, modify the approved forecast of ARR and
expected revenue from tariff and charges for the remainder of the Control Period, as
part of the Annual Performance Review.
8.6
Based on the analysis of Annual Performance Review and Truing up, the
Commission, may revise the ARR and Tariff for the ensuing year of the Control
Period.
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CHAPTER III:
DETERMINATION OF ARR
A 9. Details for True-up, APR and determination of ARR & Tariff
9.1
The Distribution Licensee shall submit the details for True-up for the previous year,
Annual Performance Review for the current year and Tariff Determination for the
ensuing year as per the principles discussed in the subsequent Sections.
A 10. Principles for Determination of ARR
Calculation of ARR for Wheeling Business during the Control Period
10.1
The Aggregate Revenue Requirement for the Wheeling Business of the Licensees for
each year of the Control Period, shall comprise the following items:
a)
Operation and Maintenance Expenses;
b)
Return on Equity;
c)
Interest on Working Capital;
d)
Interest on Loans;
e)
Depreciation;
f)
Income Tax;
g)
Lease Charges;
h)
Foreign Exchange Rate Variation;
i)
Less: Non-Tariff Income;
j)
Less: Income from Other Business; and
k)
Less: Income from wheeling of electricity (refer Clause 10.50)
Calculation of ARR for Retail Supply Businessduring the Control Period
10.2
The Aggregate Revenue Requirement for the Retail Supply Business of the Licensees
for each year of the Control Period, shall comprise the following items:
a)
Cost of power procurement;
b)
Transmission & Load Despatch charges;
c)
Operation and Maintenance Expenses;
d)
Return on Equity;
e)
Interest on Working Capital;
f)
Interest on Loans;
g)
Interest on Consumer Security Deposit;
h)
Depreciation;
i)
Income Tax;
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j)
Lease Charges;
k)
Foreign Exchange Rate Variation;
l)
Less: Non-Tariff Income;
m)
Less: Income from Other Business; and
n)
Less: Receipts on account of Cross Subsidy Surcharge and Additional
Surcharge from Open Access Consumers.
Operation and Maintenance Expenses
10.3
Operation and Maintenance (O&M) Expenses shall include:
a)
Salaries, wages, pension contribution and other employee costs;
b)
Administrative and General Expenses;
c)
Repairs and Maintenance Expenses.
10.4
The O&M Expenses for the Base Year of the Control Period shall be approved by the
Commission taking into account the audited accounts of FY 2015-16 to FY 2019-20,
Business Plan filed by the Licensee, estimates of the actual for the Base Year,
prudence check and any other factor considered appropriate by the Commission.
10.5
The O&M expenses permissible towards ARR of each year of the Control Period
shall be approved based on the formula shown below:
O&Mn = (R&Mn + EMPn + A&Gn) + Terminal Liabilities
Where,
R&Mn – Repair and Maintenance Costs of the Licensee for the nth year;
EMPn – Employee Costs of the Licensee for the nth year excluding terminal
liabilities;
A&Gn – Administrative and General Costs of the Licensee for the nth year.
10.6
The above components shall be computed in the manner specified below:
a) R&Mn = K*GFA* (INDXn / INDXn-1)
Where,
‘K’ is a constant (expressed in %) governing the relationship between
R&M costs and Gross Fixed Assets (GFA) and shall be calculated based
on the % of R&M to GFA of the preceding year of the Base Year in the
MYT Order after normalising any abnormal expenses;
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‘GFA’ is the opening value of the gross fixed asset of the nth year;
b)
EMPn + A&Gn = [(EMPn-1)*(1+Gn) + (A&Gn-1)]*(INDXn/ INDXn-1)
Where,
EMPn-1 – Employee Costs of the Licensee for the (n-1)th year excluding
terminal liabilities;
A&Gn-1 – Administrative and General Costs of the Licensee for the (n-1)th
year excluding legal/litigation expenses;
INDXn – Inflation factor to be used for indexing the employee cost and
A&G cost. This will be a combination of the Consumer Price Index (CPI)
and the Wholesale Price Index (WPI) for immediately preceding year
before the base year;
Gn – is a growth factor for the nth year and it can be greater than or lesser
than zero based on the actual performance. Value of Gn shall be
determined by the Commission in the MYT Order for meeting the
additional manpower requirement based on the Distribution Licensee’s
Filing, benchmarking and any other factor that the Commission feels
appropriate;
c)
INDXn = 0.55*CPIn +0.45*WPIn;
Note 1: For the purpose of estimation, the same INDXn/INDXn-1value shall be used
for all years of the Control Period. However, the Commission will consider the actual
values in the INDXn/INDXn-1at the end of each year during the Annual Performance
Review exercise and true up the employee cost and A&G expenses on account of this
variation, for the Control Period;
Note 2: Any variation due to changes recommended by the Pay Commission, wage
revision agreement, etc., will be considered separately by the Commission;
Note3: Terminal Liabilities will be approved as per actual submitted by the Licensee
along with documentary evidence such as actuarial studies.
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10.7
The Distribution Licensee, in addition to the above details shall also submit the
detailed break-up of the Legal/Litigation Expenses for the previous Years (FY 2015-
16 to FY 2019-20) along with the details and documentary evidence of incurring such
expenses. The Commission shall approve the legal expenses as per the relevant
provisions of the Jharkhand State Litigation Policy based on the necessary
documentary evidence submitted for the Control Period and shall carry out due
prudence check of legal expenses at the time of e truing up.
Capital Cost
10.8
The capital cost of the Licensee shall include the following:
a)
Expenditure incurred or projected to be incurred on original scope of work,
including the interest during construction and financing charges, any gain or
loss on account of Foreign Exchange Risk Variation during construction, on
the actual loan up to the date of commercial operation of the scheme, as
admitted by the Commission after prudence check, shall form the basis for
determination of Tariff;
b)
Capitalised initial spares subject to ceiling norm of 1.5% of the original
project cost.
10.9
The capital cost admitted by the Commission after prudence check shall form the
basis for determination of tariff:
Provided that where the Commission has given ‘in principle’ approval to the estimates
of scheme capital cost and financing plan, the same shall be the guiding factor for
applying prudence check on the actual capital expenditure:
Provided further that in case of the existing schemes, the capital cost admitted by the
Commission prior to April 01, 2021and the additional capital expenditure projected to
be incurred for respective year of the Control Period during FY 2021-22 to FY 2025-
26 as may be admitted by the Commission, shall form the basis for determination of
capital cost:
Provided also that any increase in Capital Cost due to time/cost over-run shall only be
allowed in case the Licensee establishes with the support of appropriate documents
and facts to the satisfaction of the Commission that the delay was on account of
uncontrollable factors and not attributable to the Licensee.
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10.10 Capital cost to be allowed by the Commission for the purpose of determination of
tariff will be based on the capital investment plan prepared by the Licensee and
approved by the Commission.
10.11 The amount funded through Consumer Contribution, Grants or Deposit Works for
connection to the distribution system of the Licensee shall be deducted from the
original cost of the scheme for the purpose of calculating the amount under debt and
equity under these Regulations.
10.12 Further, in case such cost has been incurred towards replacement or upgradation of
any existing assets, the original cost of the replaced asset shall be reduced and de-
capitalised from the Capital Cost.
Additional Capitalization
10.13 The capitalisation of capital expenses incurred or projected to be incurred, on the
following counts within the original scope of work, after the asset has been put to use
may be admitted by the Commission, subject to prudence check:
a)
Deferred liabilities;
b)
Works deferred for execution;
c)
Liabilities to meet award of arbitration or for compliance of the order or
directions of any statutory authority or order or decree of any court of law;
d)
On account of change in law;
e)
Any additional works/services, which have become necessary for efficient and
successful operation of the scheme, but not included in the original scheme
cost;
f)
Capital Expenses incurred due to Force Majeure conditions;
g)
Less: De-Capitalisation of replaced/upgraded assets, if any; and
h)
Less: Assets not put to use:
Provided that the details of work included in the original scope of work along with
estimates of expenditure, undischarged liabilities and works deferred for execution
shall be submitted along with the application for determination of tariff after the date
of commercial operation of the scheme.
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10.14 In case of de-capitalisation of assets of a Distribution Licensee, the original cost of
such asset as on the date of decapitalization duly certified by its Statutory Auditor
shall be deducted from the value of gross fixed asset and corresponding outstanding
loan on such assets as well as equity shall be deducted from loan and the equity
balances respectively. Such deductions shall be carried out in the year such de-
capitalisation takes place with corresponding adjustments in cumulative depreciation
and cumulative repayment of loan shall be carried out duly taking into consideration
the year in which it was capitalised.
10.15 Impact of additional capitalisation within the approved scheme cost on tariff shall be
considered by the Commission during the Annual Performance Review:
Provided that the Commission may consider any new scheme proposed on merits
subject to prudence check as per this Tariff Regulation.
Debt-Equity Ratio
10.16 Existing Schemes - In case of capital expenditure schemes capitalised prior to April
01, 2021, the debt-equity ratio as allowed by the Commission for determination of
tariff for the period ending March 31, 2021 shall be considered.
10.17 New Schemes – For capital expenditure schemes capitalised after April 01, 2021:
a)
A normative debt-equity ratio of 70:30 shall be considered for the purpose of
determination of Tariff;
b)
Incase the actual equity employed is in excess of 30%, the amount of equity
for the purpose of tariff determination shall be limited to 30%, and the balance
amount shall be considered as normative loan;
c)
Incase the actual equity employed is less than 30%, the actual debt-equity ratio
shall be considered;
d)
The premium, if any raised by the Licensee while issuing share capital and
investment of internal accruals created out of free reserve, shall also be
reckoned as paid up capital for the purpose of computing return on equity,
provided such premium amount and internal accruals are actually utilized for
meeting capital expenditure.
Note 1: Any expenditure admitted on account of committed liabilities within the
original scope of work and the expenditure deferred on techno-economic grounds but
falling within the original scope of work shall be serviced in the normative debt-
equity ratio specified in these Regulations;
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Note 2: Any expenditure on replacement of old assets or on renovation and
modernization or life extension shall be considered on normative debt-equity ratio
specified in these Regulations after writing off the entire book value of the original
assets from the capital cost of the new asset;
Note 3: Any expenditure admitted by the Commission for determination of tariff on
account of new works not in the original scope of work shall be serviced in the
normative debt-equity ratio specified in these Regulations.
10.18 The Licensee shall submit the resolution of the Board of the Company or approval of
the competent authority in other cases regarding infusion of funds from internal
resources in support of the utilization made or proposed to be made to meet the capital
expenditure of the Distribution Licensee.
Return on Equity
10.19 The rate of return on equity shall be 14.50% (post-tax) for the Control Period.
10.20 Return on equity for each year shall be allowed on equity employed in assets in use
considering the following:
a)
Equity employed in accordance with Clause 10.16of these Regulations on
assets (in use) capitalised as on the beginning of the year; and
b)
50% of the equity projected to be employed in accordance with Clause10.17of
these Regulations on assets (in use) commissioned during the year.
Interest on Loan Capital
10.21 The loans arrived at in the manner indicated in Clauses10.16 and 10.17 shall be
considered as gross normative loan for calculation of interest on loan.
10.22 The normative loan outstanding as on April 01, 2021 shall be worked out as the gross
loan by deducting the cumulative repayment as admitted by the Commission up to
March 31, 2021 from the gross normative loan.
10.23 The repayment for each year of the Control Period shall be deemed to be equal to the
depreciation allowed for that year.
10.24 In case of de-capitalization of assets, the repayment shall be adjusted by taking into
account cumulative repayment on pro-rata basis and the adjustment should not exceed
cumulative depreciation recovered up to the date of de-capitalization of such assets.
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10.25 Notwithstanding any moratorium period availed by the Licensee, the repayment of
loan shall be considered from the first year of operation of the scheme/asset.
10.26 The rate of interest shall be the weighted average rate of interest calculated on the
basis of the actual loan portfolio at the beginning of each year applicable to the
Licensee:
Provided that if there is no actual loan for a particular year but normative loan is still
outstanding, then the rate of interest shall be considered on normative basis and shall
be equal to the Bank Rate as on April 01 of the respective year of the Control Period
plus 200 basis points.
10.27 The interest on loan shall be calculated on the normative average loan of the year by
applying the weighted average rate of interest.
10.28 The above interest computation shall exclude interest on loan amount, normative or
otherwise, to the extent of capital cost funded by Consumer Contribution, Grants or
Deposit Works carried out by Distribution Licensee.
10.29 The Licensee shall make every effort to re-finance the loan as long as it results in net
savings on interest and in that event the costs associated with such re-financing shall
be borne by the users and the net savings shall be shared between the users and the
Licensee, as the case may be, in the ratio of 50:50.
Interest on Working Capital
10.30 Working capital for the Wheeling Business for the Control Period shall comprise:
a)
Maintenance spares at 1% of Opening GFA of Wheeling Business; plus
b)
Two months equivalent of the expected revenue from wheeling charges at the
prevailing tariffs; minus
c)
Amount, if any, held as security deposits.
10.31 Working capital for the Retail Supply of Electricity for the Control Period shall
comprise:
a)
Maintenance spares at 1% of Opening GFA for Retail Supply Business; plus
b)
Two months equivalent of the expected revenue from sale of electricity at the
prevailing tariffs; minus
c)
Amount held as security deposits under Clause (a) and Clause (b) of sub-
section (1) of Section 47 of the Act from consumers and Distribution System
Users net of any security held for Wheeling Business; minus
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d)
One-month equivalent of cost of power purchased including the Inter-State
and Intra-State Transmission Charges and Load Despatch Charges, based on
the annual power procurement plan.
10.32 Rate of interest on working capital shall be equal to the Bank Rateas on September 30
of the financial year in which the MYT Petition is filed plus 350 basis points. At the
time of true up, the interest rate shall be adjusted as per the actual rate prevailing on
April 01 of the financial year for which truing up exercise has been undertaken.
Interest on Consumer Security Deposits
10.33 Interest paid on consumer security deposits shall be as specified by the Commission
in JSERC (Electricity Supply Code) Regulations, 2015 as amended or as replaced
from time to time.
Depreciation
10.34 Depreciation shall be calculated every year on the amount of original cost of the fixed
assets as admitted by the Commission:
Provided that depreciation shall not be allowed on assets funded by Consumer
Contribution and Capital Subsidies/Grants. Provision for replacement of such assets
shall be made in the Capital Investment Plan.
10.35 Depreciation for each year shall be determined based on the methodology as specified
in these Regulations along with the rates and other terms specified in these
Regulations.
10.36 Depreciation shall be calculated annually, based on the straight-line method at the
rates specified at Appendix-I. The base value for the purpose of depreciation shall be
original cost of the asset:
Provided that the Distribution Licensee shall ensure that once the individual asset is
depreciated to the extent of seventy (70) percent of the Book Value of that asset,
remaining depreciable value as on March 31 of the year closing shall be spread over
the balance useful life of the asset.
10.37 Depreciation shall be charged from the first year of commercial operation of the asset.
In case, the operation of the asset is for a part of the year, depreciation shall be
charged on a pro-rata basis.
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10.38 The residual value of assets shall be considered as 10% and depreciation shall be
allowed to a maximum of 90% of the original cost of the asset. Land is not a
depreciable asset and its cost shall be excluded while computing 90% of the original
cost of the asset.
Provided that the salvage value for IT equipment and software shall be considered as
NIL and 100% value of the assets shall be considered depreciable;
10.39 The Commission may, in the absence of the Fixed Assets Register, calculate
Depreciation (%) arrived by dividing the Depreciation and the Average Gross Fixed
Assets as per the latest available Audited Accounts of the Distribution Licensee. The
Depreciation (%) so arrived shall be multiplied by the Average GFA approved by the
Commission for the relevant Financial Year to arrive at the Depreciation for that
Financial Year.
10.40 In case of de-capitalization of assets, the cumulative depreciation shall be adjusted by
taking into account the depreciation recovered through tariff corresponding to the
decapitalised asset during its useful services.
Cost of Power Procurement
10.41 Quantum of Power Purchase: The Commission approved category-wise sales
forecast shall be used along with distribution loss trajectory for estimating the
Licensees’ power procurement requirement for each year.
10.42 The
Licensee
shall
be
allowed
to
recover
the
net
cost
of
power
it procures from sources approved by the Commission, viz.,intra-State and inter-State
Trading Licensees, Bilateral Purchases, Bulk Suppliers, State Generating Stations,
Independent Power Producers, Central Generating Stations, non-conventional energy
generators, generation business of the Licensee and others, assuming maximum
normative rebate available from each source for payment of bills:
Provided that the Licensee shall propose the cost of power procurement taking into
account the latest available Energy Charge Rate incurred in the on going year
considering the Fuel Price Adjustment formula specified for the generating stations in
the JSERC (Terms and Conditions for Determination of Generation Tariff)
Regulations, 2020 and any amendments thereof and net revenues earned by sales of
surplus power through bilateral exchanges and Unscheduled Interchange (UI)
transactions:
Provided further that where the Licensee utilises a part of the approved power
purchase or bulk supply allocated or contracted for the Retail Supply Business for its
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34
Trading Business, the Licensee shall provide an Allocation Statement clearly
specifying the source wise cost of power purchase that is attributable to such trading
activity ensuring that only the unscheduled power after following merit order
despatch available during that time period has been traded as surplus power.
10.43 While approving the cost of power purchase, the Commission shall determine the
quantum of power to be purchased from various sources in accordance with the
principles of merit order despatch based on a ranking of all approved sources of
supply in the order of their variable cost of power purchase. All power purchase costs
will be considered legitimate unless it is established that the merit order principle has
been violated or power has been purchased at unreasonable rates.
10.44 The estimated revenue from the sale of surplus power, if any, shall be reduced from
the gross power purchase cost for estimating the net power purchase cost in the ARR.
10.45 The RPO obligation of the Licensee will be as per the JSERC (Renewable Purchase
Obligation and its compliance) Regulations, 2016 as amended or replaced from time
to time.
10.46 Any variation in cost of power purchase at the approved distribution loss level, for
reasons beyond the control of the Licensee, shall be allowed to be recovered by way
of FPPPA as per the mechanism specified in Clause 10.69of these Regulations.
Distribution Losses
10.47 The Licensee shall file the distribution loss trajectory for the entire Control Period in
the Business Plan commensurate with the Capital Investment Plan for each year of the
Control Period for approval of the Commission after verification and evaluation of the
same.
10.48 The Licensee shall also propose voltage-wise losses for each year of the Control
Period for the determination of voltage-wise cost of supply and determination of
voltage-wise Wheeling Tariff.
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35
Transmission, Load Despatch &Wheeling Charges
10.49 The Licensee shall be allowed to recover net transmission and load despatch charges
payable to the Transmission Licensees(inter-State Transmission Licensee, State
Transmission Licensee, etc.) and System Operators (Regional Load Despatch Centre,
State Load Despatch Centre, etc.) for access to and use of the inter-State transmission
system, intra-State transmission system and availing load despatch services assuming
maximum normative rebate available from each source for payment of bills on
presentation of bills in accordance with the tariffs approved from time to time by
Central Electricity Regulatory Commission and the appropriate State Commission, as
the case may be.
10.50 The Licensee shall also be allowed to recover the Wheeling Chargesduring the
Control Period, in case the distribution network of other Licensee is used for
procurement of power for the Retail Supply Business.
Income Tax
10.51 Tax on income, if any, on the Licensed business of the Licensee shall be limited to tax
on the allowed return on equity.
10.52 The income tax actually payable or paid limited to the tax on allowed return on equity
shall be included in the ARR while truing up. The actual assessment of income tax
should take into account benefits of tax holiday, and the credit for carry forward
losses applicable as per the provisions of the Income Tax Act, 1961 and its
amendments thereof shall be passed on to the consumers.Tax on the other income
streams of the Distribution Licensee shall not be recovered from the Beneficiaries.
Non-Tariff Income
10.53 The amount of Non-Tariff Income relating to the Distribution Business as approved
by the Commission shall be deducted from the ARR in determining the Retail Supply
Tariff and Wheeling Charges of the Distribution Business:
Provided that the Distribution Licensee shall submit full details of its forecast of Non-
Tariff Income to the Commission in such form as may be stipulated by the
Commission.
10.54 The Non-Tariff Income shall include:
a) Income from rent of land or buildings;
b) Income from sale of scrap;
c) Income from investments;
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36
d) Interest accrued on advances to suppliers/contractors;
e) Interest income on loans/advances to employees;
f) Income from rental of staff quarters;
g) Income by rental from contractors;
h) Income by hire charges from contactors and others;
i) Income from delayed payment surcharge, supervision charges, etc.;
j) Supervision charges for capital works;
k) Income from recovery against theft and/or pilferage of electricity;
l) Income from advertisements;
m) Income from sale of tender documents;
n) Profit from sale of Assets (i.e. difference of Sale value and Book value of Asset);
o) Any other Non-Tariff Income:
Provided that the interest earned from investments made out of Return on Equity
corresponding to the regulated Business of the Distribution Licensee shall not be
included in Non-Tariff Income.
Provided that the onus to substantiate, to the satisfaction of the Commission, that such
investments have been out of Return on Equity shall be on the Licensee.
Income from Other Business
10.55 Where the Licensee is engaged in any Other Business under Section 51 of the Act for
optimum utilisation of its assets and/or manpower of its Regulated Business, the
income from such business will be calculated considering the following conditions:
1. The Licensee shall not in any manner utilize the assets and facilities of the
Licensed Business or otherwise directly or indirectly allow the activities to be
undertaken in a manner that it results in the Licensed Business subsidising the
Other Business in any manner;
2. The Licensee shall not in any manner, directly or indirectly encumber the
assets and facilities of the Licensed Business for the other Business or for any
activities other than the Licensed Business;
3. The Licensee shall duly pay for all costs accounted for in the Licensed
Business, which have been incurred for Other Business and in the event of
such cost being incurred commonly for both the Licensed Business and Other
Business, apportion such cost and ensure due payment of apportioned costs to
the Licensed Business from the Other Business;
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37
4. The revenue derived from the Other Business shall be commensurate with
prevailing market conditions for such similar business activities;
5. In addition to the sharing of costs under sub-clause 3 above, the Licensee shall
account for and ensure due payment to the Licensed Business a certain
proportion of revenues from the other Business. As a general principle, the
Licensee shall retain 50% of the revenues arising on account of Other
Business and pass on the remaining 50% of the revenues to the Consumers.
10.56 The revenue from Other Business shall be deducted from the ARR in calculating the
revenue requirement of the Licensee:
Provided that the Licensee shall follow a reasonable basis for allocation of all joint
and common costs between the Distribution Business and the Other Business and
shall submit the Allocation Statement as approved by the Board of Directors to the
Commission along with his application for determination of tariff:
Provided further that where the sum total of the direct and indirect costs of such Other
Business exceeds the revenues from such Other Business, no amount shall be allowed
to be added to the ARR of the Licensee on account of such Other Business.
Lease charges
10.57 Lease charges for assets taken on lease by the Licensee shall be considered as per the
lease agreement, provided they are considered reasonable by the Commission.
Foreign Exchange Rate Variation
10.58 The Licensee shall hedge foreign exchange exposure in respect of the interest on
foreign currency loan and repayment of foreign loan acquired by the Licensee.
10.59 The Licensee shall recover the cost of hedging of foreign exchange rate variation
corresponding to the normative foreign debt, in the relevant year on year-to-year basis
as expense in the period in which it arises and extra rupee liability corresponding to
such foreign exchange rate variation shall not be allowed against the hedged foreign
debt.
10.60 The Licensee shall recover the cost of hedging and foreign exchange rate variation on
year-to-year basis as income or expense in the period in which it arises.
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38
Recovery of ARR
10.61 The Recovery of Fixed Charges approved in the Tariff Order shall be based on the
actual hours of supply as recorded in the Consumer’s Meter. The Commission, in its
MYT/Tariff Orders shall stipulate the minimum hours of supply for HT and LT
Consumers for complete recovery of Fixed Charges from such Consumers. The
recovery of Fixed Charges shall be in proportion to the stipulated minimum hours of
supply:
Provided that the reduction in Fixed Charges to be recovered so calculated shall be
treated as disallowance due to reduced hours of supply and the same shall not be
allowed to be recovered in the ARR of the Distribution Licensee:
Provided further that if the actual hours of supply are equal to or higher than the
minimum hours of supply for HT and LT Consumers for complete recovery of Fixed
Charges, then the Distribution Licensee shall recover the complete Fixed Charges.
Illustration: If the Commission has approved the minimum hours of supply of 23
hours, and Fixed Charges of Rs. 350/ kVA/ Month for any HT Consumer, and the
actual average hours of supply is 22 hours per day for such consumer in any month,
the Fixed Charges recoverable by the Distribution Licensee for such Consumer shall
be calculated as below:
Fixed Charges Recoverable = 22/23*350= Rs. 334.78/kVA/Month
Cross-Subsidy Surcharge
10.62 The surcharge payable by consumers opting for open access on the network of the
Licensee will be determined by the Commission as per the following formula:
S = T- [C/(1 – (L/ 100)) + D + R]
Where,
S is the surcharge;
T is the Tariff payable by the relevant category of consumers, including reflecting the
Renewable Purchase Obligation;
C is the per unit weighted average cost of power purchase by the Licensee, including
meeting the Renewable Purchase Obligation;
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39
D is the aggregate of transmission, distribution and wheeling charge applicable to the
relevant voltage level;
L is the aggregate of transmission, distribution and commercial losses, expressed as a
percentage applicable to the relevant voltage level;
R is the per unit cost of carrying regulatory assets:
Provided that the surcharge shall not exceed 20% of the tariff applicable to the
category of the consumers seeking open access.
Additional Surcharge on Charges of Wheeling
10.63 Additional Surcharge shall be determined on ‘case to case’ basis and shall be payable
only if the Licensee is able to conclusively demonstrate the incidence of any stranded
costs.
10.64 Cross-Subsidy Surcharge and Additional Surcharge shall be shown as revenue from
tariff from the consumer categories, which are permitted open access, and such
amount shall be utilized to meet the cross-subsidy requirements of subsidised
categories and fixed costs of the Licensee arising out of his obligation to supply. The
Licensee shall provide the details in its MYT filings based on the actuals during the
previous Control Period and submit annual filings during the Control Period.
Fuel Price and Power Purchase Adjustment (FPPPA)
10.65 In case of change in cost of power procured due to changes in fuel price, the Licensee
may carry out adjustment, without any prior approval of the Commission, through the
Fuel Price and Power Purchase Adjustment (FPPPA) formula, as specified below.
10.66 The FPPPA charge shall be applicable on the entire sale of the Licensee without
exemptions to any consumer.
10.67 The FPPPA charge applicable to each tariff category of consumers shall be displayed
prominently at the cash collection centres and on the internet website of the Licensee.
The Licensee shall also put up on his internet website such details of the additional
power purchase cost incurred and the FPPPA charged to all consumers for each
quarter along with detailed computations;
10.68 The FPPPA charge shall be computed and charged on the basis of actual variation in
fuel costs relating to power generated from own generation stations and power
procured during each quarter subsequent to such costs being incurred, and shall not be
computed on the basis of estimated or expected variations in fuel costs.
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40
10.69 The formula for the calculation of the Average FPPPA shall be as given under:
Average FPPPA (in Rs/kWh) = ABR/ACoS * C/ E
Where,
ABR= Average Billing Rate as approved by the Commission for the year under
consideration;
ACoS= Average Cost of Supply as approved by the Commission for the year under
consideration;
C=
∑ (Variable Cost of each source of power purchase during previous quarter
in Rs/kWh – Base Variable Cost of each source of power purchase as
approved under Tariff Order for the year under operation in Rs/kWh) x
Corresponding Power Purchase from each source during previous quarter in
MU;
E =
Energy sold (metered plus estimated) during previous quarter in MU:
Provided that the variation in power purchase cost due to Unscheduled Interchange/
deviation settlement charges and hydro based generation shall not be covered under
the FPPPA mechanism:
Provided further that for the generation stations/power purchase sources, which have
single part tariff, one-third (1/3) of the tariff shall be considered as fixed charge and
two-thirds (2/3) of the tariff shall be considered as energy charge for adjustment under
the given formula:
Provided also that for purchase from another Distribution Licensee as a consumer, the
FPPPA shall be applicable as levied by the Distribution Licensee selling the power:
Provided also that the cost and quantum of power purchase shall be based on bills
paid/ credits received during the previous quarter irrespective of period to which it
pertains and shall include arrears or refunds (if any) for the previous period not
considered earlier.
10.70 The FPPPA charge shall not exceed 10% of the variable component of tariff for the
applicable consumer category, or such other ceiling as may be stipulated by the
Commission from time to time.
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41
10.71 The FPPPA charge shall be allowed only in respect of approved power purchases by
the Licensee and in respect of power purchases made in accordance with
Clause10.42,where the approval of the Commission is not required under these
Regulations.
10.72 Category-wise FPPPA charge shall be calculated as below:
Category-wise FPPPA (in Rs./kWh) =
ABR(Category-wise) / ABR(Total) *
Average FPPPA (in Rs./kWh)
Where,
ABR (Category-wise)= Category-wise Average Billing Rate as approved by the
Commission for the year under consideration;
ABR (Total)= Average Billing Rate as approved by the Commission for the year
under consideration;
Average FPPPA (in Rs/kWh)= FPPPA Charge calculated as per Clause 10.69.
10.73 The category-wise FPPPA recoverable as per the formula specified above, shall be
recovered from the actual category-wise sales in Rs./kWh terms after rounding off to
two decimal points.
10.74 The Licensee shall submit details relating to the FPPPA computation to the
Commission for each quarter by the end of the following quarter for the purpose of
verification and prudence check. All the source-wise details of power procurement
should be supported with requisite documentary evidence/invoices raised by the
generators/suppliers of the power. The consumer category-wise sales shall also be
submitted in spreadsheet format.
Late Payment Surcharge
10.75 In case the payment of any bill for charges payable under these Regulations is delayed
by a Consumer beyond a period of 21 days from the date of billing, a late payment
surcharge shall be levied by the Distribution Licensee at the Bank Rate as on April 01
of the respective year plus 500 basis points shall be applicable for the first month, and
for every month or part thereof delay, the rate of late payment surcharge shall increase
by 50 basis points, subject to a maximum of Bank Rate as on April 01 of the
respective year plus 700 basis points.
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42
Prompt Payment Rebate
10.76 For payment of bills by the Consumers (Capacity Charge and Energy Charges) within
5 days of presentation of bills by the Distribution Licensee, a rebate of 2.00% shall be
allowed.
Note: In case of computation of 5 days, the number of days shall be counted
consecutively without considering any holiday. However, in case the last day or 5th
day is official holiday, the 5th day for the purpose of Rebate shall be construed as the
immediate succeeding working day (as per the official State Government’s calendar,
where the Office of the Authorized Signatory or Representative of the Beneficiary, for
the purpose of receipt or acknowledgement of Bill is situated).
Other Rebates and Surcharges
10.77 Any other Rebate/Surcharges applicable to the consumers, viz., Voltage
Rebate/Surcharge, Power Factor Rebate/Surcharge, Load Factor Rebate/Surcharge
etc., shall be applicable as specified in the MYT/ Annual Tariff Orders or the JSERC
(Electricity Supply Code) Regulations, 2015, as amended or re-enacted from time to
time.
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43
CHAPTER IV:
PROCEDURE FOR FILING OF ARR AND TARIFF
A 11. Multi-Year Tariff Filing Procedure
11.1
The Multi Year Tariff filing shall be submitted as per the provisions in these
Regulation and in the manner as per the provisions of JSERC (Conduct of Business)
Regulations, 2016, as amended or re-enacted from time to time.
11.2
The Multi Year Tariff framework shall be based on the following:
a)
Business Plan for the Wheeling and the Retail Supply Businessof the
Licensees for the entire Control Period as submitted before the Commission
for approval, prior to the start of the Control Period;
b)
Multi Year Petition on Licensees’ forecast of expected ARR for each year
of the Control Period, wheeling tariff and retail supply tariff for the first year
of the ensuing Control Period, based on reasonable assumptions of the
underlying financial and operational principles/parameters laid down under
these Regulations, and on the basis of the Business Plan;
c)
The Trajectory for specific parameters, which shall be stipulated by the
Commission for improvement of Licensee’s performance through incentives
and disincentives;
d)
Annual review of performance which shall be conducted vis-à-vis the
approved forecast and categorization of variations in performance into
controllable and uncontrollable factors.
11.3
The Licensee shall also submit the MYT filing in electronic format to the
Commission.
11.4
The Licensee shall file the MYT Petition and related documents for approval of Retail
Supply Business and Wheeling Business for the Control Period in accordance with the
MYT framework and the timelines specified in Section A 24of these Regulations
failing which:
a)
The Commission may issue the MYT order suo-motu;
b)
The Commission may disallow the return on equity to the Licensee.
11.5
The Licensee shall file the MYT Petition for the Retail Supply Business and the
Wheeling Business together with the requisite information of the expenses and
revenue attributable to the respective businesses.
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44
Before the Start of the Control Period
11.6
The Licensee shall file for the Commission’s approval, as per the Timelines specified
in Section A 24, a Business Plan and MYT Petition in accordance with Clauses6.9 to
6.15of these Regulations.
Annual Tariff Filings for the Control Period
11.7
The Licensee shall file an application for approval of Retail Supply Tariff and
Wheeling Tariff for each year of the Control Period, as per the timelines specified in
Section A 24of these Regulations, before the commencement of each year of the
Control Period.
11.8
The Licensee shall propose capacity-based wheeling tariff. The Licensee shall also
specify the distribution losses voltage-wise to provide for adjustment of losses in the
system.
11.9
The filings for wheeling tariff shall contain the following:
a)
The distribution system or network usage forecast for each year of the Control
Period consistent with the Business Plan, trued up values and annual
performance;
b)
Revenue Gap or Surplus for each year of the Control Period and tariff
proposal for meeting/adjusting the Revenue Gap or Surplus for each year;
c)
The Operation and Maintenance (O&M) Expenses estimated for the Base Year
and the actuals for the previous Control Period as per the Audited Accounts,
together with forecasts for each year of the Control Period in accordance with
Clauses10.3 to 10.6 of these Regulations;
d)
Proposal for computation of tariffs for voltage-wise Wheeling of electricity for
each year of the Control Period, including the losses and the procedure
thereof;
e)
Proposal for Non-Tariff Income with item-wise description and details;
f)
Proposal in respect of income from Other Businesses like Consultancy
Services, Convergence, Training Facilities, etc;
g)
Expected Revenue from the proposed Wheeling Tariff including Additional
Surcharge, Cross-Subsidy Surcharge, etc.
11.10 The filings for retail supply tariff shall contain the following:
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a)
Licensee shall submit proposal for retail sale of electricity for the consumers
pertaining to Retail Supply Business, which shall include tariffs for each
consumer category- slab-wise and voltage-wise- as applicable. The proposed
tariff may also be based on energy charges, demand charges, minimum
charges, etc., along with the tariff rationalization measures;
b)
Revenue Gap/Surplus for each year of the Control Period and tariff proposal
for meeting/adjusting the Revenue Gap/Surplus for each year. This should be
based on the cost of supply for various consumer categories and cross-subsidy
reduction road map;
c)
The Operation and Maintenance (O&M) Expenses estimated for the Base Year
and the actuals for the previous Control Period as per the Audited Accounts,
together with forecasts for each year of the Control Period in accordance with
Clauses10.3 to 10.6 of these Regulations;
d)
Proposals for Non-Tariff Income with item-wise description and details;
e)
Each tariff proposal submitted by the Licensee shall be supported with a cost-
of-service model allocating the costs of the Licensed business to each category
of consumers based on voltage-wise costs and losses;
f)
The proposals of the Licensee should demonstrate that the tariffs are
progressively reflecting the cost of supply;
g)
Expected revenue from the proposed retail supply tariff, and other matters
considered appropriate by the Licensee, including incentive schemes to
consumers, cross subsidy surcharge, etc;
h)
The applicable FPPPA charge calculated as per the formula mentioned in
Clause 10.69of these Regulations.
A 12. Disposal of Application
12.1
The Commission shall process the filings made by the Licensee in accordance with
these Regulations and JSERC (Conduct of Business) Regulations, 2016 and its
amendments thereof.
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46
12.2
Based on the Licensee’s filings, objections/suggestions from public and other
stakeholders, the Commission may accept the application with such modifications
and/or such conditions as may be deemed just and appropriate and issue, within 120
days of the receipt of the application and after considering all suggestions and
objections from public and other stakeholders, an order containing, inter alia, trued up
revenue and cost components for the year preceding the Base Year, estimation of
parameters for the Base Year and determination of ARR and tariff for retail supply
and wheeling business for each year of the Control Period. The Order shall also
contain the approved Business Plan, targets for controllable items and performance
targets for quality of supply for the Control Period.
A 13. Periodic Reviews
Review during the Control Period
13.1
To ensure smooth implementation of the Multi Year Tariff (MYT) Framework, the
Commission may undertake periodic reviews of Licensee’s performance during the
Control Period, to address any practical issues, concerns or unexpected outcomes that
may arise.
13.2
The Licensee shall submit the Annual Performance Review report as part of annual
review on actual performance as per the timelines specified in the Section A 24of
these Regulations to assess the performance vis-à-vis the targets approved by the
Commission at the beginning of the Control Period. This shall include annual
statements of its performance and accounts including audited/authenticated accounts
and the tariff worked out in accordance with these Regulations.
13.3
The Licensee shall also submit the True up of ARR and corresponding tariff
adjustments as per the timelines specified in the Section A 24of these Regulations.
The revised estimates shall be required to true-up the costs on account of
uncontrollable variations, profit sharing mechanism for exceeding the targets, and
implementation of performance framework for quality of supply targets.
13.4
The Commission may also specify any modifications to the forecast of the Licensee
for the remainder of the Control Period, with detailed reasons for the same.
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47
Review at the end of the Control Period
13.5
Towards the end of the Control Period, the Commission shall seek to review whether
the implementation of the principles laid down in these Regulations has achieved their
intended objectives. While doing this, the Commission shall take into account, among
other things, the industry structure, sector requirements, consumer and other
stakeholder expectations and Licensee’s requirements at that point in time. Depending
on the requirements of the sector to meet the objective of the Act, the Commission
may revise the principles for the next Control Period.
13.6
The end of the Control Period shall be the beginning of the next Control Period and
the Licensee shall follow the same procedure unless specified otherwise by the
Commission.
13.7
The Commission shall analyse the performance of the Licensee with respect to the
targets set out at the beginning of the Control Period and based on the actual
performance, expected efficiency improvements and other factors prevalent,
determine the initial values for the next Control Period.
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CHAPTER V:
MISCELLANEOUS PROVISIONS
A 14. Issue of Orders and Practice Directions
14.1
Subject to the provisions of the Act and these Regulations, the Commission may,
from time to time, issue Orders and Practice Directions in regard to the
implementation of these Regulations and procedure to be followed on various matters,
which the Commission has been empowered by these Regulations to direct, and
matters incidental or ancillary thereto.
14.2
Notwithstanding anything contained in these Regulations, the Commission shall have
the authority, either suo-motu or on a Petition filed by any interested or affected party,
to determine the tariff of any Applicant.
A 15. Non-Compliance of Directions
15.1
State Load Despatch Centre may give such directions and exercise such supervision
and control as may be required for ensuring integrated operation of the power system
for achieving maximum economy and efficiency and every Licensee, generating
company, sub-station and any other person connected with the operation of the power
system shall comply with such directions.
15.2
If any Distribution Licensee fails to comply with the directions issued, it shall be
liable to a penalty as per Section 146 of the Electricity Act, 2003.
A 16. Dispute Resolution
16.1
In case of dispute, any of the parties may make an application in accordance with the
JSERC (Conduct of Business) Regulations, 2016, as amended from time to time,
including statutory re-enactment thereof, for settlement of the dispute.
A 17. Power to remove difficulties
17.1
In case of any difficulty in giving effect to any of the provisions of this Regulation,
the Commission may by general or special order, issue appropriate directions to
Distribution Licensee(s) etc., to take suitable action, not being inconsistent with the
provisions of the Act, which appear to the Commission to be necessary or expedient
for the purpose of removing the difficulty.
17.2
The Licensees may make an application to the Commission and seek suitable orders
to remove any difficulties that may arise in implementation of these Regulations.
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A 18. Power of relaxation
18.1
The Commission may in public interest and for reasons to be recorded in writing,
relax any of the provision of these Regulations.
A 19. Interpretation
19.1
If a question arises relating to the interpretation of any provision of these Regulations,
the decision of the Commission shall be final.
A 20. Saving of Inherent Powers of the Commission
20.1
Nothing contained in these Regulations shall limit or otherwise affect the inherent
powers of the Commission from adopting a procedure, which is at variance with any
of the provisions of these Regulations, if the Commission, in view of the special
circumstances of the matter or class of matters and for reasons to be recorded in
writing, deems it necessary or expedient to depart from the procedure specified in
these Regulations.
A 21. Enquiry and Investigation
21.1
All enquiries, investigations and adjudications under these Regulations shall be done
by the Commission through the proceedings in accordance with the provisions of the
JSERC (Conduct of Business) Regulations, 2016, as amended from time to time.
A 22. Power to amend
22.1
The Commission may from time to time add, vary, alter, suspend, modify, amend or
repeal any provisions of this Regulation.
A 23. Savings
23.1
Nothing in these Regulations shall be deemed to limit or otherwise affect the inherent
power of the Commission to make such orders as may be necessary to meet the ends
of justice or to prevent abuse of the process of the Commission.
23.2
Nothing in these Regulations shall bar the Commission from adopting in conformity
with the provisions of the Act a procedure, which is at variance with any of the
provisions of these Regulations, if the Commission, in view of the special
circumstances of a matter or class of matters and for reasons to be recorded in writing,
deems it necessary or expedient for dealing with such a matter or class of matters.
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23.3
Nothing in these Regulations shall, expressly or impliedly, bar the Commission
dealing with any matter or exercising any power under the Act for which no
Regulations or Regulations have been framed, and the Commission may deal with
such matters, powers and functions in a manner it thinks fit.
(By order of the Commission)
Rajendra Prasad Nayak,
Secretary
Jharkhand State Electricity Regulatory Commission
Jharkhand Gazette (Extraordinary), Thursday, 12th November, 2020
51
A 24. Summary of Timelines
S.
No.
Description
Filing of the
Document by
Furnishing
additional
information as
sought by the
Commission
Disposal of the
Application
1.
Business Plan for the
Control Period and MYT
Petition for the Control
Period for FY 2021-22 to
FY 2025-26 with Retail
and Wheeling Tariffs for
first year of the Control
Period
November 30,
2020
Within 30 days of
filing of document
Within 120 days of
acceptance of the filing
2.
True-Up for the previous
year,
Annual
Performance Review for
the current year and ARR
& Tariff Determination
for the next year of the
Control Period
November 30
of the financial
year for which
APR has been
sought
Within 30 days of
filing of document
Within 120 days of
acceptance of the filing
Jharkhand Gazette (Extraordinary), Thursday, 12th November, 2020
52
APPENDIX I: DEPRECIATION SCHEDULE
Asset Description
Straight Line
Depreciation(%)
Land owned under full title
0.00
Land held under lease
2.67
a) for investment in the land
2.67
b) for cost of clearing site
2.67
Assets Purchased New:
Building & civil engineering works
i) Offices & showrooms
2.67
ii) Temporary erection such as wooden structures
100
iii) Roads other than kutcha roads
2.67
iv) Others
2.67
Transformers, transformer (Kiosk) sub-station equipment & other fixed
apparatus (including plant foundations)
i) Transformers (including foundations) having a rating of 100 kVA & above
4.22
ii) Others
4.22
Switchgear including cable connections
4.22
Lightning arrestors
4.22
Batteries
12.77
Cables and Duct System
4.22
Overhead lines including supports
i) Lines on fabricated steel operating at voltages higher than 66 kV
4.22
ii) Lines on steel supports operating at voltages higher than 13.2 kV but not
exceeding 66 kV
4.22
iii) Lines on steel or reinforced concrete supports
4.22
iv) Lines on treated wood supports
4.22
Meters
12.77
Self-propelled vehicles
12.77
Air conditioning plants
i) Static
4.22
ii) Portable
7.60
Office Equipment, Furniture, Internal Wiring and Street Light Fittings
6.33
Apparatus let on hire
i) Other than motors
7.60
ii) Motors
4.22
Communication equipment
6.33
IT Equipment and Software
15.00
Any Other Asset not covered above
4.22 (or as approved
by the Commission
considering asset life
and residual value)
Printed & Published by the Superintendent of Jharkhand Government Press, Doranda, Ranchi.
Jharkhand Gazette (Extraordinary) 570 -- 50.