Goa Gazette, No. 1718-11, 20 June 2017

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Reg. No. G-2/RNP/GOA/32/2015-2017

RNI No. GOAENG/2002/6410

Panaji, 20th June, 2017 (Jyaistha 30, 1939)

SERIES I No. 11

EXTRAORDINARY

No. 2

GOVERNMENT OF GOA

Department of Power

Office of the Chief Electrical Engineer

___

Notification

120/03/JERC/MYT/CEE/Tech

The Electricity Department, Government of Goa, filed its petition for Annual Performance Review of FY 2015-16 & FY 2016-17, Retail supply Tariff for FY 2017-18 and True-up for FY 2011- -12 & FY 2012-13, according to the Regulations and as per the procedures outlined in Section 61, 62 & 64 of the Electricity Act, 2003, before the Hon'ble Joint Electricity Regulatory Commission for the State of Goa and Union Territories.

In exercise of the powers conferred under various sections of the Electricity Act, 2003 and all powers enabling therein, on behalf of the Joint Electricity Regulatory Commission for the State of Goa and Union Territories, has issued the Tariff Order dated 23rd May, 2017 for Determination of Tariff for FY 2017-18, Annual Performance Review of FY 2015-16 and FY 2016- 17 & True-up for FY 2011-12 & FY 2012-13 with effective from 1st April 2017 and shall remain valid till issuance, of further Orders of the Commission, for the Electricity Department, Government of Goa.

The above is hereby brought to the notice of the general public.

By order and in the name of the Governor of Goa.

N. N. Reddy, Chief Electrical Engineer & ex officio Additional Secretary (Power).

Panaji, 20th June, 2017.

493 Suggestions are welcomed on e-mail: dir–[email protected] 493OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 11 (EXTRAORDINARY No. 2) 20TH JUNE, 2017

TARIFF ORDER

Determination of Tariff for FY 2017-18

Annual Performance Review of FY 2015-16 and FY 2016-17

&

True-up of FY 2011-12 and FY 2012-13

Petition No. 228/2017

For

Electricity Department, Government of Goa

23rd May, 2017

संयुक्त वद्यिुत वनियिामक आयोग (गोाि राज्य और संघ शाससत प्रदेशोंके सएि) JOINT ELECTRICITY REGULATORY COMMISSION For the State of Goa and Union Territories,

ं ज, एचएसआईआईडीसी कायाायि पररसर, उद्योग वहिारफे ज-V, गुड़गांि-¹²²⁰¹⁶ हररयााि 2 ति, ािणज्यिनकिु

2nd Floor, HSIIDC Office Complex, Vanijya Nikunj, Udyog Vihar, Phase-V, Gurgaon-122 016 (Haryana) दूरभाष: 0124-2875302 फै क्स: 0124-2342853 Phone: 0124-2875302 Fax: 0124-2342853 Website: www.jercuts.gov.in Email: [email protected]494 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 11 (EXTRAORDINARY No. 2) 20TH JUNE, 2017 Before the Joint Electricity Regulatory Commission For the State of Goa and Union Territories, Gurgaon

QUORUM Shri M.K. Goel (Chairperson) Smt. Neerja Mathur (Member)

Petition No. 228/2017

In the matter of

Approval for the True-up of the FY 2011-12 & the FY 2012-13, Annual Performance Review

for the FY 2015-16 & FY 2016-17 and Tariff determination proposal for the FY 2017-18.

And in the matter of

Electricity Department, Government of Goa (EDG) ……………………….………………. Petitioner

ORDER

Dated: 23rd May, 2017

a. This Order is passed in respect of the Petition filed by the Electricity Department, Government of Goa (EDG) for approval for the True-up of the FY 2011-12 & the FY 2012-13, Annual Performance Review of the FY 2015-16 & FY 2016-17 and Aggregate Revenue Requirement (ARR) and the Tariff proposal for the FY 2017-18.

b. After receiving the Petition, the Commission scrutinised its contents and requisitioned further information/clarifications on the data gaps observed in the Petition to take a prudent view of the Petition. The Commission also held a Technical Validation Session to determine its sufficiency. Further, suggestions/comments/objections were invited from the public/stakeholders. Public Hearing was held and the stakeholders/Public were heard.

The schedule of activities performed in the course of this quasi-judicial process are given below:

c. The approved tariff for the FY 2017-18, as detailed in the Chapter "Tariff Schedule," shall come into force from 1st April, 2017 and shall remain valid till further Orders of the Commission.

d. The licensee shall publish the revised Tariff Schedule and the salient features of tariff within one week of receipt of the Order in three daily newspapers in the respective local languages of the region, besides English, having wide circulation in their respective areas of supply.

e. Ordered as above, read with attached document giving detailed reasons, grounds and conditions.

-Sd-

-Sd-

एम. के . गोयल

नीरजा माथुर

(सदस्य)

(अध्यक्ष)

संयुक्त वद्यिुत वनियिामक आयोग

(गोाि और कें द्र शाससत प्रदेशों के सएि)

स्थाि: गुडगााँ ि ददािंक: 23 मई 2017py

(Certified Copy)

र्कीति र्तवारी, सचवि

Table of Contents

List of Abbreviations

Chapter 1. Introduction

1.1. About JERC

In exercise of the powers conferred by Section 83 of the Electricity Act, 2003, the Central Government constituted a two member (including Chairperson) Joint Electricity Regulatory Commission for all Union Territories except Delhi to be known as "Joint Electricity Regulatory Commission for Union Territories" with headquarters at Delhi as notified vide notification No. 23/52/2003–R&R dated 02nd May, 2005. Later, with the joining of the State of Goa, the Commission came to be known as "Joint Electricity Regulatory Commission for the State of Goa and Union Territories" as notified on 30th May, 2008. The Joint Electricity Regulatory Commission for the State of Goa and Union Territories (Andaman & Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman & Diu, Lakshadweep and Puducherry) started functioning with effect from September, 2008. The office of the Commission is located in Gurgaon, Haryana.

1.2. Electricity Regulatory Process in the Electricity Department, Government of Goa

In earlier years, the Electricity Department, Government of Goa (EDG) had submitted the Tariff and Business Plan Petitions on which the Commission had subsequently issued the following Orders:

Table 1.1: Details of Tariff and related Petitions submitted by the Petitioner so far &

Orders issued by JERC

1.3. Filing and Admission of the Present Petition

The present Petition was filed by EDG vide letter dated 27th December, 2016 which was received at the Commission's office on 04th January, 2017. The Petition completed in all respects was admitted on 11th January, 2017 and numbered as Petition No. 228/2017.

1.4. Interaction with the Petitioner

The Order has referred at numerous places to various actions taken by the "Commission." It may be mentioned for the sake of clarity that the term "Commission," except for the hearing and Orders, denotes the Secretariat of the Commission responsible for carrying out the technical due diligence and validation of data of the Petitions filed by the Electricity Department, Government of Goa (EDG), obtaining and analysing information/clarifications received from the Electricity Department, Government of Goa (EDG), and submitting relevant issues for consideration of the Commission.

The Commission's staff interacted regularly with the Petitioner to seek clarifications and justifications on various issues essential for analysis of the Tariff Petition, and conducted a Technical Validation Session (TVS) with the Petitioner during which discrepancies in the Tariff Petition were pointed out and additional information sought by the Commission was informed. Relevant dates, including dates of correspondence and interaction with the Petitioner are as follows:

Table 1.2: List of interactions with the Petitioner

1.5. Public Hearing process

The Commission had noted that in view of the State Assembly Elections 2017, the Model Code of Conduct was imposed in Goa on 04th January, 2017 following the announcement of the elections for 40 assembly constituencies of legislative assembly.The elections were held on 04th February, 2017, while the results were declared on 11th March, 2017.

After the end of Model Code of Conduct, the Commission initiated the proceedings and directed the Petitioner to publish a Summary of the Tariff Petition in an abridged form to ensure meaningful public participation. Public Notices were published by the Petitioner for inviting suggestions/objections from the stakeholders on the Tariff Petition as follows:

Table 1.3: Details of Public Notices published by the Petitioner

The Petitioner also uploaded the Petition on its website https://www.goaelectricity.gov.in/ and invited objections and suggestions on the Petition. Interested parties/stakeholders were requested to file their suggestions/objections on the Petition to the Commission with a copy to the Petitioner on or before 27th April, 2017. Copies of the public notices published by the Petitioner are attached as Annexure 1 to this Order. The Commission received many suggestions on the Petition, on which the department responded in writing to the stakeholders, with a copy to the Commission.

1.6. Notice for Public Hearing

The Commission also published Public Notices in the leading newspapers a stabled below, giving due intimation to the stakeholders, consumers and the public at large about the Public Hearing to be conducted by the Commission on 27th April, 2017 from 10 AM onwards at the Nalanda Hall, 5th Floor, EDC House, Atmaram Borkar Road, Panaji, Goa, 403001:

Table 1.4: Details of Public Notices published by the Commission

Copies of the Public Notices published by the Commission for intimation of the Public Hearing are attached as Annexure 2 to this Order. This notice was uploaded on Commission's website also.

The major issues raised/indicated during the Public Hearing, along with comments/replies of the utility and views of the Commission thereon, have been summarised in Chapter 2 of this Order. The Commission has taken into consideration all the suggestions and comments raised on the Petition.

1.7. Organisation of the Order

This Order is organised into the following chapters:

 Chapter 1: Background and brief description of the regulatory process undertaken by the Commission.

 Chapter 2: Various suggestions and objections raised by the Stakeholders in writing, as well as during the Public Hearing before the Commission.

 Chapter 3: True-up for the FY 2011-12.

 Chapter 4: True-up for the FY 2012-13.

 Chapter 5: True-up for the FY 2013-14, FY 2014-15 and FY 2015-16

 Chapter 6: Annual Performance Review of the FY 2016-17

 Chapter 7: Approval of various Aggregate Revenue Requirement (ARR) components for the FY 2017-18.

 Chapter 8: Approach of the Commission on tariff principles and design.

 Chapter 9: Open Access Charges for the FY 2017-18.

 Chapter 10: Tariff schedule of the FY 2017-18 and Schedule of Services and Charges approved by the Commission

 Chapter 11: Directives of the Commission to Electricity Department, Government of Goa.

Chapter 2. Summary of Suggestions/Objections received, Response from the Petitioner and

the Commission's Views

2.1. Regulatory Process

On admitting the Petition, the Commission directed the Petitioner to make copies of the Petition available to the public, upload the Petition on the website and also publish the same in the newspapers in an abridged form in the given format duly inviting comments/objections from the public as per the provisions of the JERC (Terms and Conditions for Determination of Tariff) Regulations, 2009 (hereinafter referred to as the Tariff Regulations, 2009) and JERC (Multiyear Distribution Tariff) Regulations, 2014 (hereinafter referred to as the MYT Regulations, 2014) as amended from time to time.

The Public Hearing was held on 27th April, 2017 at Panaji, Goa. During the Public Hearing, some of the stakeholders who had submitted their comments in writing also presented their views in person before the Commission. Other participants from the general public, who had not submitted written objections earlier, were also given an equal opportunity to present their views/suggestions in respect of the Petition.

The list of the Stakeholders is attached as Annexure 3 to this Order.

2.2. Suggestions/Objections, Response of the Petitioner and Commission's Comments

The Commission is appreciative of the efforts of various stakeholders in providing their suggestions/comments/observations to make the Electricity Distribution Sector responsive and efficient. The Commission has noted the concerns of all stakeholders and has tried to address them to the extent possible in the tariff design and directive chapters. The submissions of the Stakeholders, response of the Petitioner and views of the Commission are summarized below:

2.2.1. Draft Solar Policy

Stakeholder's Comment:

The draft policy was notified in 2014 and was expected to be finalized shortly. However, there is no mention of the same in the proposed Tariff Structure for the FY 2017-18.

Petitioner's Response:

The Petitioner has not submitted any response.

Commission's View:

The Commission would like to inform that presently the impact of Solar Tariff in respect of the renewable purchases is already factored in while computing the total Power Purchase Cost of the EDG. Further, the impact of tariff of various solar installations based on the Solar Policy within the State of Goa shall be considered once the Policy is finalized and notified in the Official Gazette.

2.2.2. Plugging of Leakages

Stakeholder's Comment:

Lights are on in government offices even during the daytime leading to wastage of power.

Petitioner's Response:

The Petitioner clarified verbally during the hearing that officers and staff of various government offices are being briefed regularly for conservation of electricity.

Commission's View:

The Commission notes the submission of the Petitioner and advises it to regularly issue appropriate circulars to various departments/offices to make them aware about the benefits of conservation of electricity.

2.2.3. Inadequate time for filing of comments/suggestions

Stakeholder's Comment:

There were 4 public holidays in the 11 days timeframe given for submission of comments/objections/suggestions. Thus the remaining time was inadequate and the Commission is requested to take note of this.

Petitioner's Response:

The Petitioner verbally clarified at the time of Public Hearing that the notices were issued as per the provisions of the Conduct of Business Regulations framed by JERC

Commission's View:

The Commission notes the concern of the Stakeholders. The Commission directs the Petitioner to ensure that adequate time is given to the Stakeholders to submit their comments with due consideration of intervening holidays next time onwards. Further, the Commission always follows a transparent and participative approach and hence has been accepting the comments/suggestions of the Stakeholders till the time of the hearing.

2.2.4. Regarding utilization of Electricity Duty

Stakeholder's Comment:

While the tourism industry is paying the highest rate of Electricity Duty, the department in return is not giving attention to the development of infrastructure to meet the tourism industry requirements.

Petitioner's Response:

The Petitioner has not submitted any response.

Commission's View:

The Commission would like to highlight that levy of Electricity Duty and its usage is strictly under the purview of the Government. However, various schemes for augmentation of infrastructure are underway. The stakeholder is advised to take up its specific concern related to infrastructure/services directly with the department under intimation to the Commission.

2.2.5. Financial Accounting of the Revenue

Stakeholder's Comment:

There are issues of proper accounting of the revenue as highlighted by the Petitioner.

Petitioner's Response:

The Petitioner clarified verbally at the time of the Hearing that there were issues in the billing in the FY 2015-16 which have now been addressed.

Commission's View:

The Commission has noted the submissions of the Petitioner and directs the Petitioner to make appropriate arrangements so that such issues do not occur in future.

2.2.6. Modification in applicability of clause to Hotel Industries.

Stakeholder's Comment:

The last sentence of the proposal may be deleted i.e.

The Tariff under this category will be applicable only from prospective basis i.e. from the

succeeding month of receipt of certificate and no retrospective effect to be provided.

And should be replaced with the following:

The concessional tariff will be applicable for the month of receipt of certificate or the

following month.

Petitioner's Response: The Petitioner has not submitted any response.

Commission's View: The Commission has dealt with this issue in Chapter 8. "Tariff Principles and Design".

Chapter 3. True-up for the FY 2011-12

3.1. Applicable provisions of JERC for the State of Goa and Union Territories (Terms and

Conditions for Determination of Tariff) Regulations, 2009

The True-up of the previous years is to be carried out as per Regulation 8 (2) of the JERC for the State of Goa and Union Territories (Terms and Conditions for Determination of Tariff) Regulations, 2009 hereinreferred to as Tariff Regulations, 2009:

"(2) (i) After audited accounts of a year are made available, the Commission shall undertake

similar exercise as above with reference to the final actual figures as per the audited

accounts. This exercise with reference to audited accounts shall be called 'Truing Up'.

(ii) The Truing Up for any year will ordinarily not be considered after more than one

year of 'Review'.

(3) The revenue gap of the ensuing year shall be adjusted as a result of review and

truing up exercises.

(4) While approving such expenses/revenues to be adjusted in the future years as

arising out of the Review and/or Truing up exercises, the Commission may allow the

carrying costs as determined by the Commission of such expenses/revenues. Carrying costs

shall be limited to the interest rate approved for working capital borrowings.

(5) For any revision in approvals, the licensee would be required to satisfy the

Commission that the revision is necessary due to conditions beyond its control.

(6) In case additional supply is required to be made to any particular category, the

licensee may, any time during the year make an application to the Commission for its

approval. The application will demonstrate the need for such change of consumer mix and

additional supply of power and also indicate the manner in which the licensee proposes to

meet the cost for such change of consumer mix and additional supply of power.

(7) The Commission may consider granting approval to such proposals provided the

cost of additional supply is ordinarily met by the beneficiary category."

3.2. Approach for the True-up of the FY 2011-12

While the Petitioner has submitted the True-up for the FY 2011-12 along with the audited accounts, it has been observed that the Petitioner has not submitted certain information (even in the response to data gaps sought by the Commission) that is required to undertake a proper True-up.

The Commission has adopted the following approach which is in conformity with the Tariff Regulations, 2009 for the True-up of ARR for the FY 2011-12:

1. The Commission has considered energy availability at the periphery of the Petitioner's territory and UI sale/UI purchase from Unscheduled Interchange (UI) Accounts maintained by Southern Regional Power Committee (SRPC) and Western Regional Power Committee (WRPC) in this regard.

2. The total power purchase cost of the Petitioner for the True-up period has been taken from the audited accounts of the Petitioner.

3. The Commission has adjusted the security deposit as available with the Petitioner at the end of the financial year from the Working Capital requirements of the financial year for subsequent calculation of the Interest on Working Capital.

4. In the True-up years, the Commission has considered the bad and doubtful debts actually written-off as an expense and is not allowing any provision for bad debts.

For the issues in regards to the True-up other than listed above, the Commission has adopted treatment on basis of Tariff Regulations, 2009.

The Commission had determined the ARR for the FY 2011-12 vide its Order dated 27th June, 2012.

In this Chapter, the Commission has analysed all the elements of actual revenue and expenses for the FY 2011-12 and has carried out the True-up of expenses and revenue with reference to the actual figures (final) as per the audited accounts, after a prudence check and has permitted necessary adjustments in cases where variations are for reasonable and justifiable reasons.

3.3. Energy sales

Petitioner's submission:

The actual energy sales for the FY 2011-12 were 2,880.11 MU, as against 2,746.40MU approved earlier by the Commission vide Tariff Order dated 27th June, 2012.

Commission's analysis:

The Commission, after going through the submissions of the Petitioner including the audited accounts, has considered the energy sales at 2,880.11 MU as submitted by the Petitioner for the purpose of True-up of the FY 2011-12 as shown in the following Table:

Table 3.1: Energy Sales approved by the Commission in the True-up

of the FY 2011-12 (in MU)

Therefore, the Commission approves the total sales of 2,880.11 MU in the True-up of FY 2011-12.

3.4. Power Purchase Quantum and Cost

Petitioner's submission:

An amount of Rs. 1,125.10 crore has been incurred for the procurement of 3811.77 MU of power in the FY 2011-12 as against the total power purchase cost of Rs. 1,060.47 crore approved by the Commission for the purchase of 3740.19 MU of power in the FY 2011-12 in its Order dated 27th June, 2012.

The source-wise actual power purchase quantum and cost for FY 2011-12 is summarized in Table below:

Table 3.2: Power Purchase quantum (MU) and cost (Rs. crore) submitted by the Petitioner

for the True-up of the FY 2011-12

Commission's Analysis:

The Commission has verified the power purchase details as submitted by the Petitioner in its Petition with the publicly available information from the Regional Energy Accounts (REA) maintained by Western Region Power Committee (WRPC) on their website (http://www.wrpc.gov.in/) for the Central Generating Stations (CGS). Further, apart from western region, the Petitioner also gets supply from the southern region from the NTPC's Ramagundam Thermal Power Station. The Commission has validated the power purchase details pertaining to this station from the publicly available information from the Regional Energy Accounts (REA) maintained by Southern Region Power Committee (SRPC) on their website (http://www.srpc.kar.nic.in/).

The Commission observes that there is huge variation of 374.02 MU in information as submitted by the Petitioner and as available in the REA for FY 2011-12 towards the purchase from CGS (except UI).

To cross check this anomaly, the Commission sought power purchase bills from the Petitioner. However, the Petitioner responded as follows:

"ED-Goa submits that the compilation data for two years as per Format 4 is an enormous task

to be carried out and will also be a time consuming process. It will be difficult to compile the

data in Format 4 within such short time.

However, the actual Monthly Power Purchase summary for NTPC, NPCIL, Co-generations,

NVVNL, PGCIL-WR, PGCIL-SR, KPTCL Wheeling charges for FY 2011-12 on accrual basis were

provided to the Hon'ble Commission during the tariff determination process of FY 2012-13 and

FY 2013-14 vide petition No. 40/2011, 70/2012 and 99/2013. It is requested to the Hon'ble

Commission to refer to the data submission made during the tariff proceeding during those years

for further analysis".

The Commission further notes that in the Tariff Order dated 27th June, 2012, the Commission had considered the quantum of power purchase from NTPC and NPCIL for the FY 2011-12 based on the bills made available at that point of time by the Petitioner and provisional/final REA available in the WRPC/SRPC websites at that point of time.

The summary of the power purchase quantum from NTPC and NPCIL stations for the FY 2011-12 as approved in the Order dated 27th June, 2012, the current submission by the Petitioner and information as now available in the REA is submitted below:

The Commission would like to highlight that the Petitioner has not provided a copy of the bills matching with the audited accounts to validate its claim. As the alternate source for validation of claim of quantum of power purchase for FY 2011-12 is not made available by the Petitioner, the Commission finds it appropriate to consider the information now verified from REA for the purpose of True-up of the FY 2011-12 as it is in almost in the same range as approved in the Order dated 27th June, 2012.

Also, the Commission notes that the Petitioner has done netting off of the UI over-drawal and UI under-drawal in its submission. The Commission, as a part of the prudence check, has considered the over-drawal and under-drawal separately from the Unscheduled Interchange (UI) accounts maintained by WRPC as well as SRPC.

Further, the Commission has also verified the power purchase cost as submitted by the Petitioner with the amount reflecting in the audited accounts of the FY 2011-12. Hence the Commission approves the power purchase cost as submitted by the Petitioner.

Accordingly the Commission approves the following power purchase cost and quantum for the FY 2011-12 in the following Table:

Table 3.3: Power purchase quantum (in MU) and cost (Rs. crore) approved by the Commission in the

True-up of FY 2011-12

The Commission observes that the Power Purchase cost of Rs. 1,125.10 crore as claimed by the Petitioner is the same as reflected in the audited accounts for the FY 2011-12.

The total power purchase quantum and cost as submitted by the Petitioner and approved by the Commission is tabulated hereunder:

Table 3.4: Summary of Power Purchase approved by the Commission in the True-up

of the FY 2011-12

Therefore, the Commission approves the overall power purchase quantum of 3656.48 MU

at the cost of Rs. 1125.10 crore in the True-up of the FY 2011-12.

3.5. Renewable Purchase Obligations (RPOs)

As per Clause 1, Sub-clause (1) of the JERC for the State of Goa and UTs (Procurement of Renewable Energy) Regulations, 2010

"Each distribution licensee shall purchase electricity (in kWh) from renewable energy

sources, at a defined minimum percentage of the total consumption of all the consumers in

its area during a year."

The Commission, in its Business Plan Order dated 22nd December, 2015 issued in the

Petition No. 186/2015, has reiterated that all the pending RPO's upto the FY 2015-16

must be fulfilled by the Petitioner by 31st March, 2016 and no backlog would be allowed

to carried forward to the MYT Control Period from FY 2016-17 to FY 2018-19.

The Petitioner has not submitted any information towards RPO compliance in the Petition. Further, in response to data gaps, the Petitioner has submitted that the RPO backlog has been fully eliminated in the FY 2015-16. The Petitioner also provided copy of the affidavit as submitted in the Petition No. 175/2015 in this context.

Keeping in view the above, the Commission has not considered any incentive/penalty

towards RPO compliance in the FY 2011-12 and shall consider the same at the time of

True-up of the FY 2015-16.

3.6. Intra-State Transmission and Distribution (T&D) losses

Petitioner's Submission:

Intra State T&D Losses and Inter State Losses have been claimed at 16.21% and 4.83% respectively for the FY 2011-12 as against 13.48% and 4.31% approved by the Commission. Further, the accounting in the FY 2011-12 has witnessed a transitional change from cash to accrual method which resulted into change in energy accounting with regards to billing also. Also, Tariff Policy, 2006 allows a suitable transition framework to be provided for the licensees by SERC to reach the desired levels of service as quickly as possible. Therefore, the Commission is requested to approve the said T&D Losses due to such change in the transition period.

Commission's Analysis:

The Commission has analyzed the actual Intra-State T&D losses based on the drawal schedule as available on the WRPC and SRPC websites. The actual drawal at the periphery of Goa has been considered from the weekly UI sheets for the year as available on the WRPC and SRPC websites as shown in the Table below:

Further, the sales allowed for the FY 2011-12 i.e. 2,880.11MU has been considered, to arrive at the actual Intra-State T&D loss of 9.46% for the utility as tabulated below:

Table 3.5: Intra-State T&D Losses approved by the Commission in the True-up

of the FY 2011-12 (MU)

The Commission, therefore, considers the actual Intra-State T&D loss of 9.46%f or the

True-up of the FY 2011-12.

Further, the Commission accepts the submission of the Petitioner that the accounting in the FY 2011-12 has witnessed a transitional change from cash to accrual method which resulted into change in energy accounting with regards to billing also. As the Petitioner has prepared and submitted accounts based on commercial principles for the 1st time for the FY 2011-12, the Commission has decided not to consider any incentive/penalty for the over achievement/ /under achievement of T&D Losses in the FY 2011-12 keeping in view the transition period required for such change.

3.7. Energy Balance

Petitioner Submission

The energy balance for the FY 2011-12 is tabulated below:

Table 3.6: Energy Balance for FY 2011-12 as submitted by the Petitioner (MU)

Commission's analysis:

As detailed in previous sections, the Commission has examined the REA and weekly UI accounts for the FY 2011-12 as available in the public domain on the websites of SRPC and WRPC for validating the energy purchased by the Petitioner from the power plants/ /traders/ exchange/ banking arrangement/UI mechanism.

Accordingly, the Energy Balance as considered by the Commission for the True-up of the FY 2011-12 is shown in Table below:

Table 3.7: Energy Balance approved by the Commission for True-up of the FY 2011-12 (MU)

3.8. Employee Expenses

Petitioner's Submission:

Employee expenses for the FY 2011-12 are based on the actual employee expenses incurred during the entire year.

The employee cost as approved by the Commission in the FY 2010-11 was Rs. 123.51 crore whereas the actual expenditure for the FY 2011-12 was Rs. 155.04 crore, resulting in increase of 26%. The WPI for FY 2011-12 was ~8.93% against which the escalation in the cost is ~15%. Also, the audited employee cost for the FY 2010-11 is Rs. 149 crore which means the resultant increase on YoY basis is only ~3%. Employee cost has increased due to the impact of WPI and the accrual basis of accounting methodology adopted in the said year.

Commission's Analysis:

The Commission observes that the employee expenses approved in the past were based on the estimates prepared on cash basis and not accrual basis. The Petitioner has prepared and submitted the audited accounts prepared on commercial principles for the first time.

Accordingly, the Commission finds it appropriate to consider the actual employee costs as available in the audited accounts for the purpose of True-up of the FY 2011-12 as shown in the following Table:

Table 3.8: Employee Expenses approved by the Commission for the True-up of the

FY 2011-12 (Rs. crore)

Therefore, the Commission approves actual employee expenses of Rs. 155.04 crore and

for the True-up of the FY 2011-12.

3.9. Administrative and General (A&G) Expenses

Petitioner's Submission:

In the Tariff Order dated 27thJune, 2012 and APR order dated 31st March, 2013, the Commission had approved the A&G expenses of Rs. 19.31 crore for the FY 2011-12.

Commission's Analysis:

The Commission observes that the A&G expenses approved in the past were based on the estimates prepared on cash basis and not accrual basis. The Petitioner has prepared and submitted the audited accounts prepared on commercial principles for the first time.

Accordingly, the Commission finds it appropriate to consider the actual A&G expenses as available in the audited accounts for the purpose of True-up of the FY 2011-12. However, the Commission would like to highlight that the Petitioner has considered an expense of Rs. 2 crore under the sub-head "Energy Conservation Expense" in the R&M Expenses in FY 2011-12. The Commission is of the view that this expense is of the nature of A&G Expense and not R&M Expenses and has accordingly considered this expense of Rs. 2 crore as part of A&G expenses for the True-up of the FY 2011-12.

The A&G Expenses as submitted by the Petitioner and approved by the Commission are shown in the Table below:

Table 3.9: A&G Expenses approved by the Commission for the True-up of the FY 2011-12

(Rs. crore)

Therefore, the Commission approves actual A&G expenses of Rs. 15.80 crore for the True-up of

the FY 2011-12.

3.10. Repair and Maintenance (R&M) Expenses

Petitioner's Submission:

Repairs and Maintenance activities are being undertaken as a step towards improvement of systems, reduction in breakdowns, and reduction in response time and increasing preventive maintenance. Further, the R&M expenses actually incurred for the FY 2011-12 are lower than those approved by the Commission.

Further, R&M expenses are necessary for maintenance of infrastructure and for ensuring proper Standard of Performance of the Electricity Department Goa and therefore the Commission is requested to approve Rs. 9.52 crore for the FY 2011-12 as R&M expenses.

Commission's Analysis:

The Commission observes that the R&M expenses approved in the past were based on the estimates prepared on cash basis and not accrual basis. The Petitioner has prepared and submitted the accounts prepared on commercial principles for the first time.

Accordingly, the Commission finds it appropriate to consider the actual R&M expenses as available in the audited accounts for the purpose of True-up of the FY 2011-12. However, the Commission has not considered the R&M expense of Rs. 2.00 crore towards "Energy Conservation Expense" in the FY 2011-12 as the same has been considered as part of the A&G Expenses.

The R&M expenses as submitted by the Petitioner and approved by the Commission are shown in the following Table:

Table 3.10: R&M Expenses approved by the Commission for the True-up of the FY 2011-12

(Rs. crore)

Therefore, the Commission approves actual R&M expenses of Rs. 7.52 crore for the

True-up of the FY 2011-12.

3.11. Gross Fixed Assets (GFA), Capitalisation and Depreciation

Petitioner's Submission:

The opening balance of GFA for the FY 2011-12 comes to Rs. 595.50 crore as per the annual accounts. In the Tariff order dated 27th June, 2012, the Commission had not considered the opening value of Assets while approving Gross Fixed Assets as the Petitioner had not submitted a reliable Fixed Asset Register and audited accounts to support the claim in the Petition. Now, the present submission of the True-Up for the FY 2011-12 is based on the audited accounts.

Further, the prevailing infrastructure is insufficient to cater to the present load and hence to meet the increasing demand from HT and LT load, it is absolutely necessary to undertake significant capital expenditure. Accordingly, the capital expenditure of Rs. 160.41 crorewas undertaken for the FY 2011-12 and the assets worth Rs. 98.19 crore net (Rs.101.40 addition less Rs. 3.21 crore retired) were capitalized and the Commission is requested to allow the actual expenditure and capitalisation so as to ensure the creation of infrastructure for adherence to the Standards of Performance and Supply Code Regulations.

Also, as per Regulation 26 of Tariff Regulations, 2009, depreciation for the assets has been calculated annually at the rates specified by CERC from time to time on different asset categories. Further, the depreciation arrived in annual accounts for the FY 2011-12 is based on the rates specified by the Commission in its Tariff Regulations which is charged on pro-rata basis and the Commission is requested to approve the depreciation of Rs. 32.75 crore for the FY 2011-12.

Commission's Analysis: In the Order dated 27th June, 2012, the Commission had ordered as follows:

"The Commission in its order dated 07thMay, 2012 had disallowed the opening GFA in

absence of the audited accounts and Fixed Asset and Depreciation Registers and gave a

directive to the Petitioner to furnish the same urgently and the same was repeated year

after year.

However, the Petitioner has now furnished the audited accounts and the Fixed Asset

Register (FAR) for the FY 2011-12. The Commission has also taken note of the fact that the

Petitioner has prepared the FAR based on physical verification of Fixed Assets carried out

by the Department. However there is discrepancy in the figure of fixed assets as reflected

in the audited balance sheet and the FAR. The Commission has considered the figure of

Gross Fixed Assets as reflected in the FAR as it is based on actual physical verification of

assets available".

However, the Commission has now reviewed the impact of this approach across all utilities under its jurisdiction. The Commission observes that in all practical circumstances, the information as available in the Fixed Assets Register (FAR) has to be the same as that available in the audited accounts. The Commission also notes that the Petitioner has made sincere efforts for preparation of the FAR. The Commission is of the view that once the verification of all the assets is complete, the information available in the audited accounts shall tally with the information available in the FARs.

Accordingly, the Commission finds it appropriate to henceforth consider the full amount of GFA as per the audited accounts since FY 2011-12.

Accordingly, the Commission has taken the opening GFA, asset addition and closing GFA as per the audited accounts for the FY 2011-12 as shown in the following Table:

Table 3.11: GFA approved by the Commission in the True-up of FY 2011-12 (Rs crore)

In respect of depreciation, the Commission has followed Regulation 26 of the Tariff Regulations 2009, as under:

"26. Depreciation

(1) For the purpose of tariff, depreciation shall be computed in the following manner:

(i) The value base for the purpose of depreciation shall be the historical cost of the

assets, that is actual expenses limited to approved capital cost where such capital cost

has been approved by the Commission:

Provided that land is not a depreciable asset and its cost shall be excluded from the

capital cost while computing depreciation.

(ii) The historical cost of the asset shall include additional capitalization.

(iii) The historical cost shall include foreign currency funding converted into

equivalent rupees at the exchange rate prevalent on the date when foreign currency

was actually availed but not later than the date of commercial operation.

(iv) Depreciation for generation and transmission assets shall be calculated annually

as per straight-line method over the useful life of the asset at the rate of depreciation

specified by the Central Electricity Regulatory Commission from time to time:

Provided that the total depreciation during the life of the asset shall not exceed 90% of the

original cost.

Depreciation for distribution and other assets not covered by CERC shall be as per

Government of India norms of 1994 as may be revised by the Commission from time to

time."

The Commission has not applied the CERC rates applicable on the average assets in place, since some of these assets have already attained the 90% limit of depreciation during the life of the asset, and accordingly has approved depreciation as per the audited accounts for the True-up of the FY 2011-12 as shown in the following Table:

Table 3.12: Asset-wise depreciation approved by the Commission in the True-up

of FY 2011-12 (Rs. crore)

The depreciation amount as submitted by the Petitioner and approved by the Commission in the True-up of FY 2011-12 is shown in the Tables below:

Table 3.13: Depreciation approved by the Commission in the True-up of FY 2011-12

(Rs. crore)

Therefore, the Commission approves actual depreciation of Rs. 32.75 crore for True-up of

the FY 2011-12.

3.12. Interest and Finance Charges

Petitioner's Submission:

Regulation 25 of the Tariff Regulations 2009, provides for Interest and Finance Charges on Loan. The majority of capital assets are created out of the equity contribution from the Government of Goa. However, the interest expenses have been claimed on the basis of normative loan calculation whereby 70% of the opening GFA and the capitalisation during the year has been considered as normative debt. Further, interest on normative loan is higher than that approved in the Order by the Commission due to the fact that opening GFA was not approved by the Commission in the absence of audited accounts, resulting in disallowance of the opening normative loan also. Other than interest on normative loan,521 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 11 (EXTRAORDINARY No. 2) 20TH JUNE, 2017 other Interest and Finance charges towards bank charges, LC charges, etc. have also been claimed.

The Commission is requested to approve the Interest & Finance Charges at Rs. 52.78 crore (Rs. 49.81 crore + Rs. 2.97 crore) for FY 2011-12.

Commission's Analysis:

As per Regulation 25 of the Tariff Regulations, 2009:

"1) For existing loan capital interest and finance charges on loan capital shall be

computed on the outstanding loans, duly taking into account the rate of interest and

schedule of repayment as per the terms and conditions of relevant agreements.

2) Interest and finance charges on loan capital for new investments shall be computed

on the loans, duly taking into account the rate of interest and the schedule of repayment as

per the terms and conditions of relevant agreements. The rate of interest shall, however, be

restricted to the prevailing Prime Lending Rate of the State Bank of India.'' (Read SBI

Advance Rate)

Further as per Regulation 23 of the said Tariff Regulations, 2009:

"23. Debt-Equity Ratio

1) For the purpose of determination of tariff, debt-equity ratio in case of existing,

ongoing as well as new projects commencing after the date of notification of these

Regulations shall be 70:30. Where equity employed is more than 30%, the amount of equity

for the purpose of tariff shall be limited to 30% and the balance amount shall be considered

as loan. Where actual equity employed is less than 30%, the actual debt and equity shall be

considered for determination of tariff:

2) Provided that the Commission may, in appropriate cases, consider equity higher than

30% for the purpose of determination of tariff, where the generating company or the

licensee is able to establish to the satisfaction of the Commission that deployment of equity

more than 30% is in the interest of the general public: .

3) The debt and equity amounts arrived at in accordance with sub-regulation (1) above

shall be used for all purposes including for determining interest on loan, return on equity,

Advance against Depreciation and Foreign Exchange Rate Variation.

4) Provided that in the case of an Integrated Utility, till the time it remains Integrated

Utility, it shall be entitled to return on its capital base as per Schedule VI to the repealed

Electricity (Supply) Act, 1948."

The above stated Regulations prescribe the debt-equity ratio for the assets

deployed, post the commencement of the Tariff Regulations, 2009. However, for the

EDG, the Commission has determined the Aggregate Revenue Requirement (ARR) for

the first time for the FY 2011-12 and accordingly, the Commission finds it appropriate

not to consider any loan for capitalisation prior to FY 2011-12.

Therefore, opening normative loan for FY 2011-12 is taken as NIL and the

normative interest on loan has been considered only on the assets created during the

year FY 2011-12 onwards as per the audited accounts.

The Commission has considered a net addition of Rs. 98.19 crore in gross fixed assets for the FY 2011-12, which are considered funded through normative debt to the tune of 70%. The Commission, for the purpose of funding of the capitalisation has considered the normative debt-equity ratio of 70:30, whereby it has considered the addition in normative loan at Rs. 68.74 crore (70% of Rs. 98.19 crores) for FY 2011-12.

The Commission has considered weighted average rate of SBI PLR for the year at 14.40% for the FY 2011-12 and the repayment of the debt has been considered at 10% the opening loan amount. Further, the Commission verified the other financing charges from the audited accounts and accordingly has approved the same for the FY 2011-12.

The calculation of the interest on the normative loan is given in the following Table:

Table 3.14: Normative interest on loan approved by the Commission in the True-up

of FY 2011-12 (Rs. crore)

Therefore, the Commission approves interest and finance charges of Rs. 7.92 crore in the

True-up for the FY 2011-12.

3.13. Interest on Security Deposit

Petitioner's Submission:

Regulation 25 of Tariff Regulations, 2009 read along with Clause 47(4) of the Electricity Act, 2003 provides for Interest on Security Deposit, if any, made by the consumer with the licensee.

An amount of Rs. 0.14 crore have been claimed as actual interest paid to the consumers on security deposits for the FY 2011-12.

Commission's Analysis:

The Commission has verified the submission from the audited accounts and observed that the Petitioner has provisioned an amount of Rs. 1.62 crore and Rs. 2.88 crore against interest on security deposit for the FY 2011-12 and FY 2012-13 respectively and the cumulative amount of Rs. 4.50 crore has been shown as current liability in the balance sheet of FY 2012-13. Further, there is no mention of Rs. 0.14 crore in the audited accounts of FY 2011-12.

The Commission has computed the interest amount due for the payment by applying the bank rate on average security deposit available as follows:

Table 3.15: Interest on Security Deposit approved by the Commission in the True-up

of FY 2011-12 (Rs. crore)

Considering the fact that there is no interest payout in actuals, the Commission has not

approved any interest on security deposit in the True-up of the ARR for the FY 2011-12. The

Commission directs the Petitioner to pay the balance interest on consumer security deposit

of Rs. 5.02 crore in the FY 2017-18.

3.14. Return on Capital Base

Petitioner's Submission:

Being an integrated utility, EDG is entitled to return on capital base under the provisions of Schedule VI of the repealed Electricity (Supply) Act, 1948 vide provision under Regulation 23 of Tariff Regulations, 2009. EDG has calculated the return on capital base at 3%. The Commission is requested to kindly allow the return on Net Fixed Assets (NFA)amounting to Rs. 13.21 crore for the FY 2011-12.

Commission's Analysis:

Being an integrated utility, EDG is entitled to return on capital base as per Regulation 23 of the Tariff Regulations, 2009. Hence the Commission approves return on capital base on the basis of GFA and cumulative depreciation as on 01st April, 2011 as submitted by the Petitioner and as verified from the audited accounts as per the following Table:

Table 3.16: Return on Capital Base approved by the Commission in the True-up

of FY 2011-12 (Rs. crore)

Therefore, the Commission approves Return on Net Fixed Assets (NFA) of Rs. 13.21 crore

in the True-up for the FY 2011-12.

3.15. Interest on Working Capital

Petitioner's Submission:

Interest on Working Capital has been claimed in accordance with Regulation 29 of the Tariff Regulations, 2009. Further, the closing balance of the security deposit has been deducted from the total normative Working Capital requirement for computing the Working Capital requirement as per the methodology followed by the Commission in its previous Tariff Order.

Commission's Analysis:

As per Regulation 29 of the Tariff Regulations, 2009:

"(3) Subject to prudence check, the working capital for integrated utility shall be the sum of

one month requirement for meeting:

a. Power purchase cost

b. Employees cost

c. Administration & general expenses

d. Repair & Maintenance expenses.

e. Sum of two month requirement for meeting Fuel cost.

4) The rate of interest on working capital shall be equal to the short term Prime Lending

Rate of State Bank of India on the 1st April of the relevant financial year. The interest on

working capital shall be payable on normative basis notwithstanding that the

generating company/licensee has not taken working capital loan from any outside

agency or has exceeded the working capital loan amount worked out on the normative

figures."

The Commission has considered the calculation of the different components of the Working Capital on the basis of the above-stipulated norms. The Commission has deducted average consumer security deposit from the Working Capital requirement considered for True-up of ARR for the FY 2011-12. The Commission has considered the SBI PLR as applicable on 01st April, 2011. (https://www.sbi.co.in/portal/web/interest- rates/benchmark-prime-lending-rate-historical-data)

The detailed calculations of the interest on the Working Capital are as mentioned in the Table below:

Table 3.17: Interest on Working Capital approved by the Commission in the True-up

of FY 2011-12 (Rs. crore)

Therefore, the Commission approves Rs. 3.25 crore as Interest on Working Capital in the

True-up for the FY 2011-12.

3.16. Provision for Bad and Doubtful Debts

Petitioner's Submission:

The Commission has stated in the Tariff Order that bad and doubtful debts actually written off, limited to 1% as per the Regulations, would be considered only after the availability of audited accounts and would be taken up at the time of the True-up of the ARR. Accordingly, based on the audited accounts, bad and doubtful debts actually written off in the ARR amount to Rs. 2.54 crore in the FY 2011-12.

Commission's Analysis:

As specified in Regulation 28 of the Tariff Regulations, 2009 (to be read with the format):

"The Commission may, after the generating company/licensee gets the receivables audited,

allow a provision for bad debts up to 1% of receivables in the revenue requirement of the

generating company/licensee."

It is observed that as per the audited accounts, the licensee has actually written off bad

and doubtful debts amounting to Rs. 11,930 in the FY 2011-12 which the Commission

hasaccordingly considered and approved for the True-up of the FY 2011-12.

3.17. Non-Tariff Income

Petitioner's Submission:

Non-Tariff Income of Rs. 17.04 crore has been claimed in the True-up of the FY 2011-12.

Commission's Analysis:

The Commission has verified the submission of the Petitioner from the audited accounts and found the same to be correct. Hence, the total Non-Tariff Income is Rs. 17.04 crore for the FY 2011-12 as per the audited accounts, which is approved by the Commission as follows:

Table 3.18: Non-Tariff Income approved by the Commission in the True-up

of FY 2011-12 (Rs. crore)

Therefore, the Commission approves the Non-Tariff Income of Rs. 17.04 crore and or the

FY 2011-12.

3.18. Revenue from Sale of Surplus Power/ Unscheduled Interchange (UI)

Petitioner's Submission:

Revenue from the sale of surplus power is Rs. 104.18 crore for FY 2011-12 against the corresponding approved amount of Rs. 118.41 crore for the FY 2011-12.

Commission's Analysis:

The Commission has analyzed the submission made by the Petitioner regarding the sale of surplus power in the Exchange plus UI sales from the audited accounts and found that the Petitioner has received the following revenue from the sale of surplus power in the Exchange and UI in the FY 2011-12:

Table 3.19: Revenue from Sale of surplus power approved by the Commission in the True-up

of FY 2011-12 (Rs. crore)

Therefore the Commission approves the revenue from sale of surplus power of Rs. 104.18 crore in the True-up for the FY 2011-12.

3.19. Revenue at approved Retail Tariff

Petitioner's Submission:

The revenue from Tariff was Rs. 856.35 crore for the FY 2011-12.

Commission's Analysis:

The Commission has verified revenue from the sale of power within the State in the FY 2011-12 from the audited accounts.

The category-wise revenue as submitted by the Petitioner and approved by the Commission is shown in the following Table:

Table 3.20: Revenue from Retail Sale power approved by the Commission in the True-up

of FY 2011-12 (Rs. crore)

Therefore, the Commission approves the revenue from sale of power at Rs. 856.35 crore in

the True-up for the FY 2011-12.

3.20. Aggregate Revenue Requirement (ARR)

Petitioner's Submission:

The Net Aggregate Revenue Requirement as approved by the Commission in the Review of the ARR for the FY 2011-12 was Rs. 1,096.80 crore. Based on the True-up submissions for the FY 2011-12, the Commission is requested to approve an ARR of Rs. 1,287.81 crore.

Commission's Analysis:

The Commission on the basis of the detailed analysis of the cost parameters of the ARR has considered and approved the revenue requirement in the True up of the FY 2011-12 at Rs. 1,239.37 crore as given in the following Table:

Table 3.21: Net ARR approved by the Commission in the True-up of FY 2011-12 (Rs. crore)

3.21. Revenue Gap/(Surplus)

Petitioner's Submission:

Along with the 'Tariff Proposal for the FY 2012-13' submitted vide affidavit dated 05thApril, 2012, it was submitted that the entire revenue gap for FY 2011-12 as per the revised estimates is to be met through budgetary support and there is no revenue gap of FY 2011-12 to be carried forward in FY 2012-13.

A letter from the Government of Goa (addressed to EDG and signed by the Under Secretary Finance, Budget Department, Government of Goa) for budgetary support for FY 2011-12 dated 05th April, 2012, the main contents of which are reproduced below:

''I am directed to state that the Government of Goa has decided to continue with the

existing electricity tariff for the consumers in the state during the Financial Year 2011-12,

and had provided the requisite budgetary support to meet the deficit, and hence has

decided not to carry forward the deficit as may be approved by the Hon'ble Commission

during the process of finalizing the ARR for FY 2011-12 to the next financial year 2012-13.''

Accordingly, the revenue gap of Rs. 431.46 crore for FY 2011-12, has not been carried forward and will be met through the budgetary support as proposed in the earlier submission.

Commission's Analysis:

The Commission has analyzed and approved the Revenue Gap/(Surplus) as follows:

Table 3.22: Revenue Gap/(Surplus) approved by the Commission in the True-up of the

FY 2011-12 (Rs. crore)

The Petitioner has submitted that the entire gap for the FY 2011-12 is committed to be funded by the Government of Goa by way of budgetary support. The petitioner in this regard has also submitted the letter from Government of Goa wherein the Government of Goa has assured to provide requisite budgetary support to meet the deficit at the existing tariff for the FY 2011-12. In view of the budgetary support for the FY 2011-12 from the Government of Goa, the Commission approves Nil net revenue gap in the True-up for the FY 2011-12.

Chapter 4. True-up for the FY 2012-13

4.1. Applicable provisions of JERC for the State of Goa and Union Territories (Terms and

Conditions for Determination of Tariff) Regulations, 2009

The True-up of the FY 2012-13 is to be carried out as per Regulation 8(2) of the Tariff Regulations, 2009:

(2) (i) After audited accounts of a year are made available, the Commission shall undertake

similar exercise as above with reference to the final actual figures as per the audited

accounts. This exercise with reference to audited accounts shall be called 'Truing Up'.

(ii) The Truing Up for any year will ordinarily not be considered after more than one year

of 'Review'.

(3) The revenue gap of the ensuing year shall be adjusted as a result of review and truing up

exercises.

(4) While approving such expenses/revenues to be adjusted in the future years as arising

out of the Review and/or Truing up exercises, the Commission may allow the carrying costs

as determined by the Commission of such expenses/revenues. Carrying costs shall be

limited to the interest rate approved for working capital borrowings.

(5) For any revision in approvals, the licensee would be required to satisfy the Commission

that the revision is necessary due to conditions beyond its control.

(6) In case additional supply is required to be made to any particular category, the licensee

may, any time during the year make an application to the Commission for its approval. The

application will demonstrate the need for such change of consumer mix and additional

supply of power and also indicate the manner in which the licensee proposes to meet the

cost for such change of consumer mix and additional supply of power.

(7) The Commission may consider granting approval to such proposals provided the cost of

additional supply is ordinarily met by the beneficiary category."

4.2. Approach for the True-up of the FY 2012-13

While the Petitioner has submitted the True-up for the FY 2012-13 along with the audited accounts, it has been observed that the Petitioner has not submitted certain information (even in the response to data gaps sought by the Commission) that is required to undertake a proper True-up.

The Commission has adopted the following approach which is in conformity with the Tariff Regulations, 2009 for True-up of ARR for the FY 2012-13:

1. The Commission has considered energy availability at the periphery of the Petitioner's territory and UI sale/UI purchase from Unscheduled Interchange (UI) Accounts maintained by Southern Regional Power Committee (SRPC) and Western Regional Power Committee (WRPC) in this regard.

2. The total power purchase cost of the Petitioner for the True-up period has been taken from the audited accounts of the Petitioner.

3. The Commission has adjusted the security deposit as available with the Petitioner at the end of the financial year from the Working Capital requirements of the financial year for subsequent calculation of the Interest on Working Capital.

4. In the True-up years, the Commission has considered the bad and doubtful debts actually written-off as an expense and not allowing any provision for bad debts.

For the issues in regards to the True-up other than listed above, the Commission has adopted treatment on basis of Tariff Regulations, 2009.

The Commission had determined the ARR for the FY 2012-13 vide its Order dated 27th June, 2012 and subsequently carried out the Review of the FY 2012-13 in its Order dated 31st March, 2013.

In this Chapter, the Commission has analysed all the elements of actual revenue and expenses for the FY 2012-13 and has carried out the True up of expenses and revenue with reference to the actual figures (final) as per the audited accounts, after a prudence check and has permitted necessary adjustments in cases where variations are for reasonable and justifiable reasons.

4.3 Energy Sales

Petitioner's Submission:

The actual energy sales for the FY 2012-13 were 2,925.24MU, as against 2,885.98MU approved earlier by the Commission vide Tariff Order dated 31st March, 2013.

Commission's Analysis:

The Commission, after going through the submissions of the Petitioner including the audited accounts, has considered the energy sales at 2,925.24 MU as submitted by the Petitioner for the purpose of True-up of the FY 2012-13 as shown in the following Table:

Table 4.1: Energy Sales approved by the Commission in the True-up of the FY 2012-13

(in MU)

Therefore, the Commission approves the total sales of 2,925.24 MU in the True-up of the

FY 2012-13.

4.4. Power Purchase Quantum and Cost

Petitioner's Submission:

An amount of Rs. 1,045.22 crore has been incurred for the procurement of 3,576.54 MU of power in the FY 2012-13 as against the total power purchase cost of Rs. 866.01 crore approved by the Commission for the purchase of 3547.79MU of power for the FY 2012-13 in its Order dated 31st March, 2013.

The source-wise actual power purchase quantum and cost for FY 2012-13 is summarized in the following Table:

Table 4.2: Power Purchase quantum (MU) and cost (Rs. crore) submitted by the Petitioner

for the True-up of the FY 2012-13

Commission's Analysis:

The Commission has verified the power purchase details as submitted by the Petitioner in its Petition with the publicly available information from the Regional Energy Accounts (REA) maintained by Western Region Power Committee (WRPC) on their website (http://www.wrpc.gov.in/) for the Central Generating Stations (CGS). Further, apart from western region, the Petitioner also gets supply from the southern region from the NTPC's Ramagundam Thermal Power Station. The Commission has validated the power purchase details pertaining to this station from the publicly available information from the Regional Energy Accounts (REA) maintained by Southern Region Power Committee (SRPC) on their website (http://www.srpc.kar.nic.in/).

The Commission observes that there is a minor difference of 0.28 MU in the energy quantum as submitted by the Petitioner and as available in REA for the FY 2012-13 for the purchase from CGS (except UI).

Also, the Commission notes that the Petitioner has done netting off of the UI over- drawal and UI under-drawal in its submission. The Commission, as a part of the prudence check, has considered the over-drawal and under-drawal separately from the Unscheduled Interchange (UI) accounts maintained by WRPC as well as SRPC.

Further, the Commission has also verified the power purchase cost as submitted by the Petitioner with the amount reflecting in the audited accounts of the FY 2012-13. Hence the Commission approves the power purchase cost as submitted by the Petitioner.

Accordingly the Commission approves the following power purchase cost and quantum for the FY 2012-13 in the Table given below:

Table 4.3: Power purchase quantum (in MU) approved by the Commission in the True-up

of FY 2012-13

The Commission observes that the Power Purchase cost of Rs. 1,045.22 crore as claimed by the Petitioner is the same as reflected in the audited accounts for the FY 2012-13.

The total power purchase quantum and cost as submitted by the Petitioner and approved by the Commission is tabulated hereunder:

Table 4.4: Summary of Power Purchase approved by the Commission in the True-up

of the FY 2012-13

Therefore, the Commission approves the overall power purchase quantum of 3,658.10

MU at the cost of Rs. 1,045.22 crore in the True-up of the FY 2012-13.

4.5. Renewable Purchase Obligations (RPOs)

As per Clause 1, sub-clause (1) of the JERC for the State of Goa and UTs (Procurement of Renewable Energy) Regulations, 2010

"Each distribution licensee shall purchase electricity (in kWh) from renewable energy

sources, at a defined minimum percentage of the total consumption of all the consumers in its

area during a year."

The Commission, in its Business Plan Order dated 22nd December, 2015 issued in the

Petition No. 186/2015, has reiterated that all the pending RPO's upto the FY 2015-16 must

be fulfilled by the Petitioner by 31st March, 2016 and no backlog would be allowed to carried

forward to the MYT Control Period from FY 2016-17 to FY 2018-19.

The Petitioner has not submitted any information towards RPO compliance in the Petition.

Further, in response to data gaps, the Petitioner has submitted that the RPO backlog has been fully eliminated in the FY 2015-16. The Petitioner also provided copy of the affidavit as submitted in the Petition No. 175/2015 in this context.

Keeping in view the above, the Commission has not considered any incentive/penalty

towards RPO compliance in the FY 2012-13 and shall consider the same at the time of True-

up of the FY 2015-16.

4.6. Intra-State Transmission and Distribution (T&D) losses

Petitioner's Submission:

For the FY 2012-13, the Intra State T&D Loss and Inter State Loss is 13.58% and 4.57% respectively. The power scheduled from the Southern Region originates from Ramagundam periphery, which is located in Andhra Pradesh. Hence, the power which shall be made available at Goa periphery is subjected to substantial amount of losses viz Intra State Loss of Andhra Pradesh, Inter State Losses of SR & WR. Further, there was a Grid Diversion for a period of 6 months due to KEB Ckts breakdown and PP outages; hence there was an additional loss in the energy available at the Goa Periphery in the first half of FY 2012-13 resulting in higher inter State loss.

Commission's Analysis:

The Commission has analyzed the actual T&D losses based on the drawal schedule as available on the WRPC and SRPC websites. The actual drawal at the periphery of Goa has been considered from the weekly UI sheets for the year as available on the WRPC and SRPC websites as shown in the following Table:

Further, the sales allowed for the FY 2012-13 i.e. 2,925.24 MU respectively has been considered, to arrive at the actual Intra-State T&D loss of 13.15% for the utility as tabulated below:

Table 4.5: Intra-State T&D Losses approved by the Commission in the True-up of the

FY 2012-13 (MU)

The Commission, therefore, considers the actual T&D loss of 13.15% for the True-up of

the FY 2012-13 respectively.

Further, the Commission accepts the submission of the Petitioner that the accounting in the FY 2011-12 has witnessed a transitional change from cash to accrual method which resulted into change in energy accounting with regards to billing also. As the Petitioner has prepared and submitted accounts based on commercial principles for the 1st time for the FY 2012-13, the Commission has decided not to consider any incentive/penalty for the overachievement/underachievement of T&D Losses in the FY 2012-13 keeping in view the transition period required for such change.

4.7. Energy Balance

Petitioner Submission

The energy balance for the FY 2012-13 is tabulated below:

Table 4.6: Energy Balance for FY 2012-13 as submitted by the Petitioner (MU)

Commission's Analysis:

As detailed in previous sections, the Commission has examined the REA and weekly UI accounts for the FY 2012-13 as available in the public domain on the websites of SRPC and WRPC for validating the energy purchased by the Petitioner from the power plants/ /traders/ exchange/ banking arrangement/UI mechanism.

Accordingly, the Energy Balance as considered by the Commission for the True-up of the FY 2012-13 is shown in Table below:

Table 4.7: Energy Balance approved by the Commission for True-up of the FY 2012-13 (MU)

4.8. Employee Expenses

Petitioner's Submission:

Employee expenses for the FY 2012-13 are based on the actual employee expenses incurred during the entire year. However, the employee cost in FY 2012-13 has decreased marginally as compared to FY 2011-12.

Commission's Analysis:

The Commission observes that the employee expenses approved in the past were based on the estimates prepared on cash basis and not accrual basis. The Petitioner has prepared and submitted the audited accounts prepared on commercial principles for the first time.

Accordingly, the Commission finds it appropriate to consider the actual employee costs as available in the audited accounts for the purpose of True-up of the FY 2012-13 as shown in the Table below:

Table 4.8: Employee Expenses approved by the Commission for the True-up of the

FY 2012-13 (Rs. crore)

Therefore, the Commission approves actual employee expenses of Rs. 154.63 crore for

the True-up of the FY 2012-13.

4.9. Administrative and General (A&G) Expenses

Petitioner's Submission:

In the APR order dated 31st March, 2013, the Commission had approved the A&G expenses of Rs. 8.59 crore for the FY 2012-13.

Commission's Analysis:

The Commission observes that the A&G expenses approved in the past were based on the estimates prepared on cash basis and not accrual basis. The Petitioner has prepared and submitted the audited accounts prepared on commercial principles for the first time.

Accordingly, the Commission finds it appropriate to consider the actual A&G expenses as available in the audited accounts for the purpose of True-up of the FY 2012-13 as shown in the Table below:

Table 4.9: Employee Expenses approved by the Commission for the True-up of FY 2012-13

(Rs. crore)

Therefore, the Commission approves actual A&G expenses of Rs. 22.27 crore for the

True-up of the FY 2012-13.

4.10. Repair and Maintenance (R&M) Expenses

Petitioner's Submission:

Repairs and Maintenance activities are being undertaken as a step towards improvement of systems, reduction in breakdowns, reduction in response time and increasing preventive maintenance.

For the FY 2012-13, R&M expenses have increased by 3% as compared to the cost approved by the Commission. Since in the FY 2011-12, R&M expenses were remarkably low, accordingly there couldn't be a comparison of the actual R&M expenses of the FY 2012-13 with the FY 2011-12 in the context of year on year increase in cost.

Further, R&M expenses are necessary for maintenance of infrastructure and for ensuring proper Standards of Performance of the Electricity Department Goa and therefore the Commission is requested to approve Rs. 19.16 crore for the FY 2012-13 as R&M expenses.

Commission's Analysis:

The Commission observes that the R&M expenses approved in the past were based on the estimates prepared on cash basis and not accrual basis. The Petitioner has prepared and submitted the accounts prepared on commercial principles for the first time.

Accordingly, the Commission finds it appropriate to consider the actual R&M expenses as available in the audited accounts for the purpose of True-up of the FY 2012-13 as shown in the following Table:

Table 4.10: R&M Expenses approved by the Commission for the True-up of the FY 2012-13

(Rs. crore)

Therefore, the Commission approves actual R&M expenses of Rs. 19.16 crore for the

True-up of the FY 2012-13.

4.11. Gross Fixed Assets (GFA), Capitalisation and Depreciation

Petitioner's Submission:

The opening balance of GFA comes to Rs. 693.69 crore for the FY 2012-13 as per the annual accounts. In the Tariff order dated 27th June, 2012, the Commission had not considered the opening value of Assets while approving the Gross Fixed Assets as the Petitioner had not submitted a reliable Fixed Asset Register and audited accounts to support the claim in the Petition. Now, the present submission of the True Up for the FY 2012-13 is based on the audited accounts.

Further, the prevailing infrastructure is insufficient to cater to the present load and hence to meet the increasing demand from HT and LT load, it is absolutely necessary to undertake significant capital expenditure. Accordingly, the capital expenditure of Rs. 97.20 crore was undertaken for the FY 2012-13 and the assets worth Rs. 123.15 crore net (Rs. 125.81 addition less Rs. 2.66 crore retired) were capitalized and the Commission is requested to allow the actual expenditure and capitalisation so as to ensure the creation of infrastructure for adherence to the Standards of Performance and Supply Code Regulations.

Also, as per Regulation 26 of the Tariff Regulations, 2009, depreciation for the assets has been calculated annually at the rates specified by CERC from time to time on different asset categories. Further, the depreciation arrived in annual accounts for the FY 2012-13 is based on the rates specified by the Commission in its Tariff Regulations which is charged on pro-rata basis and the Commission is requested to approve the depreciation of Rs. 35.45 crore for the FY 2012-13.

Commission's Analysis:

The Commission has taken the closing GFA of the FY 2011-12 as approved in previous Chapter as the opening GFA for the FY 2012-13. Further, the asset addition has been540 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 11 (EXTRAORDINARY No. 2) 20TH JUNE, 2017 considered as per the audited accounts to arrive at the closing GFA for the FY 2012-13 as shown in the Table below:

Table 4.11: GFA approved by the Commission in the True-up of FY 2012-13 (Rs. crore)

In respect of depreciation, the Commission has followed Regulation 26 of the Tariff Regulations 2009, as under:

"26. Depreciation

(1) For the purpose of tariff, depreciation shall be computed in the following manner:

(i) The value base for the purpose of depreciation shall be the historical cost of the assets,

that is actual expenses limited to approved capital cost where such capital cost has been

approved by the Commission:

Provided that land is not a depreciable asset and its cost shall be excluded from the capital

cost while computing depreciation.

(ii) The historical cost of the asset shall include additional capitalization.

(iii) The historical cost shall include foreign currency funding converted into equivalent

rupees at the exchange rate prevalent on the date when foreign currency was actually

availed but not later than the date of commercial operation.

(iv) Depreciation for generation and transmission assets shall be calculated annually as per

straight-line method over the useful life of the asset at the rate of depreciation specified by

the Central Electricity Regulatory Commission from time to time.

Provided that the total depreciation during the life of the asset shall not exceed 90% of the

original cost.

Depreciation for distribution and other assets not covered by CERC shall be as per

Government of India norms of 1994 as may be revised by the Commission from time to

time."

The Commission has not applied the CERC rates applicable on the average assets in place, since some of these assets have already attained the 90% limit of depreciation during the life of the asset, and accordingly has approved depreciation as per the audited accounts for the True-up of the FY 2011-12 and FY 2012-13 as shown in the following Tables:

Table 4.12: Asset-wise depreciation approved by the Commission in the True-up of

FY 2012-13 (Rs. crore)

The depreciation amount as submitted by the Petitioner and approved by the Commission in the True-up of FY 2012-13 is shown in the Table below:

Table 4.13: Depreciation approved by the Commission in the True-up of FY 2012-13

(Rs. crore)

Therefore, the Commission approves actual depreciation of Rs. 35.45 crore for True-up of

the FY 2012-13.

4.12. Interest and Finance Charges

Petitioner's Submission:

Regulation 25 of the Tariff Regulations, 2009, provides for Interest and Finance Charges on Loan. The majority of capital assets are created out of the equity contribution from the Government of Goa. However, the interest expenses have been claimed on the basis of normative loan calculation whereby 70% of the opening GFA and the capitalisation during the year has been considered as normative debt. Further, interest on normative loan is higher than that approved in the Order by the Commission due to the fact that opening GFA was not approved by the Commission in the absence of audited accounts, resulting in disallowance of the opening normative loan also. Other than interest on normative loan, other Interest and Finance charges towards bank charges, LC charges, etc. have also been claimed.

The Commission is requested to approve the Interest & Finance Charges at Rs. 61.93 crore (Rs. 60.06 crore + Rs. 1.87 crore) for FY 2012-13.

Commission's Analysis:

As per Regulation 25 of the Tariff Regulations, 2009:

"1) For existing loan capital interest and finance charges on loan capital shall be computed

on the outstanding loans, duly taking into account the rate of interest and schedule of

repayment as per the terms and conditions of relevant agreements.

2) Interest and finance charges on loan capital for new investments shall be computed on

the loans, duly taking into account the rate of interest and the schedule of repayment as

per the terms and conditions of relevant agreements. The rate of interest shall, however, be

restricted to the prevailing Prime Lending Rate of the State Bank of India.'' (Read SBI

Advance Rate)

Further as per Regulation 23 of the said Tariff Regulations, 2009:

"23. Debt-Equity Ratio

1) For the purpose of determination of tariff, debt-equity ratio in case of existing, ongoing

as well as new projects commencing after the date of notification of these Regulations shall

be 70:30. Where equity employed is more than 30%, the amount of equity for the purpose of

tariff shall be limited to 30% and the balance amount shall be considered as loan. Where

actual equity employed is less than 30%, the actual debt and equity shall be considered for

determination of tariff:

2) Provided that the Commission may, in appropriate cases, consider equity higher than

30% for the purpose of determination of tariff, where the generating company or the

licensee is able to establish to the satisfaction of the Commission that deployment of equity

more than 30% is in the interest of the general public: .

3) The debt and equity amounts arrived at in accordance with sub-regulation (1) above

shall be used for all purposes including for determining interest on loan, return on equity,

Advance against Depreciation and Foreign Exchange Rate Variation.

4) Provided that in the case of an Integrated Utility, till the time it remains Integrated

Utility, it shall be entitled to return on its capital base as per Schedule VI to the repealed

Electricity (Supply) Act, 1948."

The Commission has considered closing normative loan approved for the FY 2011-12 in the previous Chapter as opening loan for the FY 2012-13. Further, a net addition of Rs. 123.15 crore in gross fixed assets for the FY 2012-13 respectively, which are considered funded through normative debt to the tune of 70%. The Commission, for the purpose of funding of the capitalisation has considered the normative debt-equity ratio of 70:30, whereby it has considered the addition in normative loan at Rs. 86.20 crore (70% of Rs. 123.15 crores) for the FY 2012-13.

The Commission has considered weighted average rate of SBI PLR for the year at 14.61% for the FY 2012-13 and the repayment of the debt has been considered at 10% of the opening loan amount. Further, the Commission verified the other financing charges from the audited accounts and accordingly has approved the same for the FY 2012-13.

The calculation of the interest on the normative loan is given in the following Table:

Table 4.14: Normative interest on loan approved by the Commission in the True-up

of FY 2012-13 (Rs. crore)

Therefore, the Commission approves interest and finance charges of Rs. 17.71 crore in

the True-up for the FY 2012-13.

4.13. Interest on Security Deposit

Petitioner's Submission:

Regulation 25 of Tariff Regulations, 2009 read along with Clause 47(4) of the Electricity Act, 2003 provides for Interest on Security Deposit, if any, made by the consumer with the licensee.

An amount of Rs. 0.23 crore have been claimed as actual interest paid to the consumers on security deposits for the FY 2012-13.

Commission's Analysis:

The Commission has verified the submission from the audited accounts and observed that the Petitioner has provisioned an amount of Rs. 1.62 crore and Rs. 2.88 crore against interest on security deposit for the FY 2011-12 and FY 2012-13 respectively and the543 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 11 (EXTRAORDINARY No. 2) 20TH JUNE, 2017 cumulative amount of Rs. 4.50 crore has been shown as current liability in the balance sheet of FY 2012-13. Further, there is no mention of Rs. 0.23 crore in the audited accounts of the FY 2012-13.

The Commission has computed the interest amount due for the payment by applying the bank rate on average security deposit available as follows:

Table 4.15: Interest on Security Deposit approved by the Commission in the True-up

of FY 2012-13 (Rs. crore)

Considering the fact that there is no interest payout in actuals, the Commission has not

approved any interest on security deposit in the True-up of the ARR for the FY 2012-13. The

Commission directs the Petitioner to pay the balance interest on consumer security deposit

of Rs. 9.36 crore in the FY 2017-18.

4.14. Return on Capital Base

Petitioner's Submission:

EDG being an integrated Utility, it is entitled to return on capital base under the provisions of Schedule VI of the repealed Electricity (Supply) Act, 1948 vide provision under Regulation 23 of Tariff Regulations, 2009. EDG has calculated the return on capital base at 3%. The Commission is requested to kindly allow the return on Net Fixed Assets (NFA) amounting to Rs. 15.27 crore for the FY 2012-13.

Commission's Analysis:

Being an integrated utility, EDG is entitled to return on capital base as per Regulation 23 of the Tariff Regulations, 2009. Hence the Commission approves return on capital base on the basis of GFA and cumulative depreciation as on 01st April, 2012 as submitted by the Petitioner and as verified from the audited accounts as per the following Table:

Table 4.16: Return on Capital Base approved by the Commission in the True-up

of FY 2012-13 (Rs. crore)

Therefore, the Commission approves Return on Net Fixed Assets (NFA) of Rs. 15.27 crore

in the True-up for the FY 2012-13.

4.15. Interest on Working Capital

Petitioner's Submission:

Interest on Working Capital has been claimed in accordance with Regulation 29 of the Tariff Regulations, 2009. Further, the closing balance of the security deposit has been deducted from the total normative Working Capital requirement for computing the Working Capital requirement as per the methodology followed by the Commission in its previous Tariff Order.

Commission's Analysis:

As per Regulation 29 of the Tariff Regulations, 2009:

"(3) Subject to prudence check, the working capital for integrated utility shall be the sum of

one month requirement for meeting:

a. Power purchase cost.

b. Employees cost.

c. Administration & general expenses.

d. Repair & Maintenance expenses.

e. Sum of two month requirement for meeting Fuel cost.

5) The rate of interest on working capital shall be equal to the short term Prime Lending

Rate of State Bank of India on the 1st April of the relevant financial year. The interest on

working capital shall be payable on normative basis notwithstanding that the

generating company/licensee has not taken working capital loan from any outside

agency or has exceeded the working capital loan amount worked out on the normative

figures."

The Commission has considered the calculation of the different components of the Working Capital on the basis of the above-stipulated norms. The Commission has deducted average consumer security deposit from the Working Capital requirement considered for True-up of ARR for the FY 2012-13. The Commission has considered the SBI PLR as applicable on 01st April, 2012. (https://www.sbi.co.in/portal/web/interest- rates/benchmark-prime-lending-rate-historical-data)

The detailed calculations of the interest on the Working Capital are as mentioned in the Table below:

Table 4.17: Interest on Working Capital approved by the Commission in the True-up

of FY 2012-13 (Rs. crore)

Therefore, the Commission approves Rs. 0.72 crore as Interest on Working Capital in the

True-up for the FY 2012-13.

4.16. Provision for Bad and Doubtful Debts

Petitioner's Submission: The Commission has stated in the Tariff Order that bad and doubtful debts actually written off, limited to 1% as per the Regulations, would be considered only after the availability of audited accounts and would be taken up at the time of the True-up of the ARR. Accordingly, based on the audited accounts, bad and doubtful debts actually written off in the ARR amount to Rs. 2.63 crore in the FY 2012-13.

Commission's Analysis:

As specified in Regulation 28 of the Tariff Regulations, 2009 (to be read with the format): "The Commission may, after the generating company/licensee gets the receivables audited, allow a provision for bad debts up to 1% of receivables in the revenue requirement of the generating company/licensee."

It is observed that as per the audited accounts, the licensee has not written off any

amount in the FY 2012-13. Therefore, the Commission does not approve any amount

under the provision of bad and doubtful debts.

4.17. Non-Tariff Income

Petitioner's Submission:

Non-Tariff Income of Rs. 13.57 crore has been claimed in the True-up of the FY 2012-13.

Commission's Analysis:

The Commission has verified the submission of the Petitioner from the audited accounts and found the same to be correct. Hence, the total Non-Tariff Income is Rs. 13.57 crore for the FY 2012-13 as per the audited accounts, which is approved by the Commission as follows:

Table 4.18: Non-Tariff Income approved by the Commission in the True-up of

FY 2012-13 (Rs. crore)

Therefore, the Commission approves the Non-Tariff Income of Rs. 13.57 crore for the

FY 2012-13.

4.18. Revenue from Sale of Surplus Power/Unscheduled Interchange (UI)

Petitioner's Submission:

Revenue from the sale of surplus power is Rs. 32.77 crore for the FY 2012-13 against the corresponding approved amount of Rs. 6.11 crore for the FY 2012-13.

Commission's Analysis:

The Commission has analyzed the submission made by the Petitioner regarding the sale of surplus power in the Exchange plus UI sales from the audited accounts and found that the Petitioner has received the following revenue from the sale of surplus power in the Exchange and UI in the FY 2011-12 and FY 2012-13 respectively:

Table 4.19: Revenue from Sale of surplus power approved by the Commission in the True-up

of FY 2012-13 (Rs. crore)

Therefore the Commission approves the revenue from sale of surplus power of Rs. 32.77

crore in the True-up for the FY 2012-13.

4.19. Revenue at approved Retail Tariff

Petitioner's Submission: The revenue from Tariff was Rs. 973.58 crore for the FY 2012-13.

Commission's Analysis:

The Commission has verified revenue from the sale of power within the State in the FY 2012-13 from the audited accounts.

The category-wise revenue as submitted by the Petitioner and approved by the Commission is shown in the Table below:

Table 4.20: Revenue from Retail Sale power approved by the Commission in the True-up of

FY 2012-13 (Rs. crore)

Therefore, the Commission approves the revenue from sale of power at Rs. 973.58 crore

in the True-up for the FY 2012-13.

4.20. Aggregate Revenue Requirement (ARR)

Petitioner's Submission:

The Net Aggregate Revenue Requirement as approved by the Commission in the Review of the ARR for the FY 2012-13 was Rs. 1,031.99 crore. Based on the True-up submissions for the FY 2012-13, the Commission is requested to approve an ARR of Rs. 1,312.36 crore.

Commission's Analysis:

The Commission on the basis of the detailed analysis of the cost parameters of the ARR has considered and approved the revenue requirement in the True-up of the FY 2012-13 at Rs. 1,264.10 crore as given in the following Table:

Table 4.21: Net ARR approved by the Commission in the True-up of FY 2012-13 (Rs. crore)

4.21. Revenue Gap/(Surplus)

Petitioner's Submission:

The entire gap for the FY 2012-13 was committed to be funded by the Government of Goa by way of budgetary support. A letter from the Government of Goa was also submitted wherein the Government of Goa had assured that it would provide requisite budgetary support to meet the deficit at the existing tariff for the FY 2012-13. In view of the budgetary support for FY 2012-13 from the Government of Goa, there is no net revenue gap for FY 2012-13.

Accordingly, the revenue gap of Rs. 338.78 crore for the FY 2012-13, has not been carried forward and will be met through the budgetary support as proposed in the earlier submission.

Commission's Analysis:

The Commission has analyzed and approved the Revenue Gap/(Surplus) as follows:

Table 4.22: Revenue Gap/(Surplus) approved by the Commission in the True-up

of the FY 2012-13 (Rs. crore)

The Petitioner has submitted that the entire gap for the FY 2012-13 is committed to be funded by the Government of Goa by way of budgetary support. The Petitioner in this regard has also earlier submitted the letter from the Government of Goa wherein it has assured that it would provide requisite budgetary support to meet the deficit at the existing tariff for the FY 2012-13. In view of the budgetary support for the FY 2012-13549 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 11 (EXTRAORDINARY No. 2) 20TH JUNE, 2017

from the Government of Goa, the Commission approves Nil net revenue gap in the

True-up for the FY 2012-13.

Chapter 5. True-up of the FY 2013-14, FY 2014-15 and FY 2015-16

5.1. Applicable provisions of JERC for the State of Goa and Union Territories (Terms and

Conditions for Determination of Tariff) Regulations, 2009

The True-up of the previous years is to be carried out as per Regulation 8 (2) of the Tariff

Regulations, 2009:

(2) (i) After audited accounts of a year are made available, the Commission shall undertake

similar exercise as above with reference to the final actual figures as per the audited

accounts. This exercise with reference to audited accounts shall be called 'Truing Up".

(ii) The Truing Up for any year will ordinarily not be considered after more than one year of

'Review'.

(3) The revenue gap of the ensuing year shall be adjusted as a result of review and truing

up exercises.

(4) While approving such expenses/revenues to be adjusted in the future years as arising

out of the Review and/or Truing up exercises, the Commission may allow the carrying costs

as determined by the Commission of such expenses/revenues. Carrying costs shall be

limited to the interest rate approved for working capital borrowings.

(5) For any revision in approvals, the licensee would be required to satisfy the Commission

that the revision is necessary due to conditions beyond its control.

(6) In case additional supply is required to be made to any particular category, the licensee

may, any time during the year make an application to the Commission for its approval. The

application will demonstrate the need for such change of consumer mix and additional

supply of power and also indicate the manner in which the licensee proposes to meet the

cost for such change of consumer mix and additional supply of power.

(7) The Commission may consider granting approval to such proposals provided the cost of

additional supply is ordinarily met by the beneficiary category."

5.2. Approach for the True-up of the FY 2013-14, FY 2014-15 and FY 2015-16

Petitioner's Submission:

The finalization of audited accounts for the FY 2013-14 and FY 2014-15 is in process and the Commission shall be approached for truing-up at a later date when the audited accounts are available. Further, the provisional figures are available for FY 2015-16 and the finalization of accounts is under process. Based on the provisional accounts, the Commission is requested to approve the provisional actual figures of the FY 2015-16 for determination of ARR & Revenue gap and treatment thereof.

Commission's Analysis:

The Commission notes that the Petitioner has not submitted the audited accounts prepared on commercial principles for the FY 2013-14, FY 2014-15 and FY 2015-16. The Commission in its previous Orders had stressed upon the requirement of the audited accounts to bring in more accuracy in the estimates made by the Commission. The Tariff Regulations 2009 also require the licensee to file the True-up along with the audited accounts in the filing.

The Commission now directs the Petitioner to prepare and submit the accounts from the FY 2013-14 onwards based on commercial principles along with the True-up Petitions by 30th November, 2017.

The True-up would therefore be taken up only after submission of the audited accounts. Accordingly, the Commission has decided not to consider True-up for the FY 2013-14, FY 2014-15 and FY 2015-16 in the current Order.

Chapter 6. Annual Performance Review of FY 2016-17

6.1. Applicable provisions of JERC for the State of Goa and Union Territories (except Delhi)

(Multi Year Distribution Tariff) Regulations, 2014

The Annual Performance Review of the FY 2016-17 is to be carried out as per the following provisions of Regulation 8 of the JERC for the State of Goa and Union Territories (except Delhi) (Multi Year Distribution Tariff) Regulations, 2014 herein referred to as MYT Regulations, 2014:

"(1) The Commission shall undertake a review along with the next Tariff Order of the

expenses and revenue approved by the Commission in the Tariff Order. While doing so, the

Commission shall consider variations between approvals and revised estimates/actuals of

sale of electricity, income and expenditure for the relevant year and permit necessary

adjustments/changes in case such variations are for adequate and justifiable reasons. Such

an exercise shall be called 'Review'.

……(3) The revenue gap/surplus, if any, of the ensuing year shall be adjusted as a result of

review and truing up exercises.

(4) While approving such expenses/revenue to be adjusted in the future years as arising out

of the Review and/or Truing-up exercises, the Commission may allow the carrying costs as

determined by the Commission of such expenses/revenue. Carrying costs shall be limited to

the interest rate approved for working capital borrowings.

(5) For any revision in approvals, the licensee would be required to satisfy the Commission

that the revision is due to conditions beyond its control.

(6) In case additional supply is required to be made to any particular category, the licensee

may, any time during the year make an application to the Commission for its approval. The

application will demonstrate the need for such additional supply of power and also indicate

the manner in which the licensee proposes to meet the cost for such additional supply of

power."

6.2. Approach for the Review of the ARR of FY 2016-17

Petitioner's Submission:

The Annual Performance Review petition for the FY 2016-17 is based on the actual performance during the 1st half of the year and the revised estimates for the second half of the year. However, as the accounts and the audit of the previous years i.e. from FY 2013-14 onwards is still under process and therefore, the estimates of the second half are undertaken based on the prudence judgement, past experience and expected changes to occur in H2 of FY 2016-17.

Commission's Analysis:

In the provisional True-up of the FY 2015-16, the Petitioner has submitted the following:

"5.4.2 However, EDG would like to submit that there were issues related to billing of energy

to consumers for few months in H2 of FY 2015-16 due to changeover of the billing agencies

and the transition period thereof. This non-billing has resulted in to lower billing than what

it would have been in FY 2015-16 which is however billed respectively in FY 2016-17.

5.4.3 EDG submits that the meter reading, billing and collection process is being

streamlined now and had gone through a transformation phase in FY 2015-16. In the past, it

was maintained by several different agencies separately in each division and each agency

had its separate logic for bill calculation and bill generation.

5.4.4 However, now a common agency is taking over all the billing and collection data for

HT and LT consumers and a common process will be followed for all the division to avoid

ambiguity in the process and data. While this streamlining process is in progress, a lot of

errors in the legacy data have been discovered and the error rectification process is

going on."

The Commission notes from the submission made by the Petitioner that energy sales pertaining to a few months of H2 of FY 2015-16 have actually been billed in the FY 2016-17 due to the issues pertaining to changeover of the billing agencies.

During the Technical Validation Session, the Commission further asked the Petitioner to segregate the quantum of such sales which actually pertaining to the FY 2015-16 but have been billed in the FY 2016-17, and submit the revised figures to the Commission. The Petitioner expressed its inability to provide this segregated information at this stage as the information is present in the form of software dump and the analysis and segregation of information will take considerable time.

The Commission is of the view that in the absence of details of the separate actual sales

of the FY 2016-17, it is not prudent to approve the revised power purchase requirement

and revenue from retail sale on the basis of the clubbed information presently

available. The Commission shall consider the actual performance at the time of the

True-up of the FY 2016-17 once the audited accounts as directed above are submitted

by the Petitioner.

Accordingly, the Commission has decided not to consider the Annual Performance Review of the FY 2016-17.

Chapter 7. Approval of the various ARR components for FY 2017-18

7.1. Approach for the ARR of FY 2017-18

The Petitioner has submitted the same ARR for the FY 2017-18 as approved in the MYT Order dated 18th April, 2016 and has not sought any variation in any expense component. However, the Petitioner has now recomputed revenue from the sale of power on the basis of the revised Tariff approved by the Commission in its previous Tariff Order. As the Commission is not undertaking any review for the FY 2016-17 for the reasons detailed in the previous chapter, the Commission is retaining the projections and consequently costs/revenue for the FY 2017-18 at the same level as approved in the MYT Order dated 18th April, 2016.

7.2. Annual Revenue Requirement (ARR)

Petitioner's Submission:

The ARR for the FY 2017-18 is proposed to be the same as that approved by the Commission in the MYT Order dated 18th April, 2016 i.e. Rs. 1845.32 crore with no variation in any of the expense components. However, the revenue from the sale of power has been computed on the basis of the revised tariff approved by the Commission for the FY 2016-17 in the Order dated 18th April, 2016.

Commission's Analysis:

As detailed in the previous Chapter, the Commission is not undertaking any review of the FY 2016-17. Since no review is being done by the Commission, the Commission finds no justification of revising the ARR of FY 2017-18 and accordingly, has decided to retain the same ARR as approved in the MYT Order dated 18th April, 2016 for FY 2017-18 as shown in the Table below:

Table 7.1 ARR approved by the Commission for FY 2017-18 (In Rs. crore)

The Petitioner shall compute fuel and power procurement cost variations, and adjustments shall be made in the consumer bills based on the Fuel and Power Purchase Cost Adjustment (FPPCA) formula notified by the Commission. For the purposes of calculation, the approved per unit cost of power purchase (Rapproved) shall be taken as 261 paisa per unit for FY 2017-18.

7.3. Revenue at existing Retail Tariff of FY 2017-18

Petitioner's Submission:

The revenue from retail tariff is projected as Rs. 1719.91 crore for the FY 2017-18.

Commission's Analysis:

Based on the approved energy sales, the number of consumers and the connected load as approved in MYT Order dated 18th April, 2016 for the FY 2017-18 and considering the existing approved retail tariff, the Commission has computed the revenue for the FY 2017- 18 as follows:

Table 7.2 Revenue from Sale of Power approved by the Commission for the

FY 2017-18 (Rs. crore)

Therefore, the Commission considers Revenue from approved Retail Tariff of Rs. 1563.67

crore for the FY 2017-18.

7.4. ARR, Revenue Deficit/(Surplus) for the FY 2017-18

Petitioner's Submission:

The Commission is requested to approve the revenue gap of Rs. 125.41 crore for the FY 2017-18.

Commission's Analysis: Keeping in view the ARR and Revenue from the sale of power approved above, the Commission hereby approves the revenue gap for the FY 2017-18 as shown in the following Table:

Table 7.3: Revenue Gap/(Surplus) approved by the Commission for the FY 2017-18 (Rs. crore)

Therefore, the Commission approves the estimated stand alone revenue gap of

Rs. 281.65 crore for the FY 2017-18.

Chapter 8. Tariff Principles and Designs

8.1. Preamble

The Commission in determining the ARR and Retail supply tariff for the FY 2017-18, has been guided by the provisions of the Electricity Act, 2003, the Tariff Policy, Regulations on Terms and Conditions of Tariff issued by the Central Electricity Regulatory Commission (CERC), and the MYT Regulations, 2014 notified by JERC under Section 64 of the Act which lay down the broad principles and guide the determination of retail Tariff.

8.2. Principles of Tariff Design

As per Regulation 36 of MYT Regulations, 2014, "Cross Subsidy, Allocation of Cost to Serve and Tariff Design"-

"a. The Commission shall gradually move towards reduction of cross subsidy in

accordance with Electricity Act, Tariff Policy and such other guidelines of the Government

as applicable.

b. The Distribution Licensee shall compute the consumer category-wise cost of supply as

per the methodology elaborated below.

c. Allocation of Cost: The Cost to serve shall be allocated to the consumer categories in

the following manner:

Step 1: Functional Demarcation of Cost–Total cost shall be divided on the basis of

functions performed such as power purchase, distribution etc.

Step 2: Classification of Cost–Each of the functionalized costs shall be further

classified, based on its intrinsic nature into Demand related cost, Energy related cost

and Customer related cost. Demand related costs shall generally be of fixed nature,

related to capacity creation and shall include interest on capital borrowing, depreciation

etc. Energy cost shall be related to quantum of electricity consumption of consumer,

such as fuel cost, interest on working capital, etc. Consumer related cost shall include

operating expenses associated with meter reading, billing and accounting.

Step 3: Allocation of Cost

6) Allocation of Demand Costs: Demand costs of all three functions shall be allocated

among consumer categories on the basis of average coincident peak demand of the tariff

categories (average of past 12 months). To facilitate determination of average coincident

peak demand for the various tariff categories, load research shall be made an integral

part of the operations of the DISCOMs and systematic load research exercises shall be

initiated.

2) Allocation of Energy Costs: Energy related costs of Distribution functions shall be allocated to consumer categories on the basis of ratio of electricity consumption of each consumer category to the total electricity consumption under the purview of the Distribution Licensee. Energy related costs of Power purchase shall be allocated to various tariff categories on the basis of block approach on merit order dispatch and incremental principle, where each tariff category shall be allocated the incremental (energy related) power purchase cost on the basis of their respective share in the incremental power purchase. For the purpose of operationalizing the block approach and incremental principle, the Commission shall identify and notify a suitable year as the "base year".

3) Allocation of Customer Costs: Customer related costs shall be allocated to

consumer categories on the basis of the ratio of number of consumers in each category

to total number of consumers under the purview of the Distribution Licensee.

d. Summation of allocated Demand cost, Energy cost and Customer cost across

functions shall be total Cost to serve for respective consumer categories. Cost to serve

reduced by revenue from a consumer category shall give total subsidy for that category.

Total subsidy for a consumer category reduced by Government subsidy, if any, shall be

cross-subsidy for that consumer category.

e. The consumers below poverty line who consume power below a specified level, say

30 units per month, shall receive a special support through cross subsidy.

f. Cross-subsidy surcharge and additional surcharge in Open Access

1. The amount received or to be received by the licensee on account of cross-subsidy

surcharge and additional surcharge, as approved by the Commission from time to time

in accordance with the Regulations specified by the Commission, shall be shown

separately against the consumer category that is permitted open access as per the

phasing plan.

2. Cross-subsidy surcharge and additional surcharge shall be shown as revenue from

the tariff from the consumer categories who have been permitted open access and such

amount shall be utilized to meet the cross-subsidy requirements of subsidized categories

and fixed costs of the Distribution Licensee arising out of his obligation to supply.

Provided that the licensee shall provide such details in its annual filings.

g. Tariff Design

1) The Commission shall be guided by the objective that the tariff progressively

reflects the efficient and prudent cost of supply of electricity.

2) After the costs have been allocated based on the method specified in clauses I and

(d) above, tariffs for different consumer categories shall be designed with due regard to

factors provided under section 62(3) of the Act.

3) The time of day tariff would be structured across three time slabs to denote

normal, peak and off-peak periods. The time-periods would vary according to different

seasons of the year i.e. summer, winter and the monsoon season. The peak tariff would

be 10%-20% higher than the normal tariff and the off-peak tariff would be priced 5%-10%

lower than the normal tariff.

4) Time of Day tariff may be introduced in a phased manner, wherein in phase 1 it would be

for HT Consumers, in phase 2 – for LT consumers consuming more than 25 KW and in

phase 3 for LT consumers consuming more than 10 KW."

In view of the above, the tariff needs to be designed in such a manner that cross subsidy among different categories of consumers is progressively brought within ±20% of the average cost of supply and that even for BPL category consumers, tariff rates are close to 50% of the average cost of supply. The Commission has taken a considerate view in this regard balancing the interest of the utility and the consumers.

Accordingly, the Commission has designed the tariff for different categories of consumers as brought out in the subsequent sections.

8.3. Additional Claim

Petitioner's Submission:

The Commission may allow the provision of unpaid security deposit of Rs. 14.01 crores to be included in the total revenue gap to be recovered in the FY 2017-18.

Commission's Analysis:

The Commission observes that it has already provided for the interest on consumer deposits to be paid in the respective years but the Petitioner is yet to pay a substantial amount of interest on the consumer security deposits.

Hence, the Commission is not factoring any provision for unpaid Interest on the Consumer Security Deposit for the calculation of the revenue gap for the FY 2017-18. The Commission will consider the interest paid on consumer security deposits for the previous years as and when the same is paid to consumers on actual basis as per the audited accounts.

The Commission directs the Petitioner to clear the entire backlog of Interest on Consumer Security Deposit within the FY 2017-18 and report the compliance to the Commission.

8.4. Tariff Proposal

Petitioner's Submission:

The Petitioner has neither proposed any hike in the Retail Tariff nor has sought any change in the approved schedule of Miscellaneous Charges. However, the Petitioner has sought the following changes in applicability of the various consumer categories as follows:

i. Separate treatment for Educational Institutions under HT category to be considered in line with the treatment provided in the LT category in the last Tariff Order to provide benefit to a larger section of the public (students). This would result in lower tariffs than the earlier charged commercial tariff.

ii. It is noted that the certificate from the Department of Tourism by Hotels to claim concessional tariff is delayed sometimes resulting in confusion on the applicability of tariff. It is requested for determination of the category of tariff for the Hotel Industry based on the certificate issued for two consecutive years. Also, the timeline for submission of the Certificate from the Department of Tourism to avail the concessional tariff shall be within four months of issue of the Tariff Order. The concessional tariff will be applicable from the month of receipt of the certificate or the following month.

iii. It is submitted that a particular consumer of Goa is getting power supplied from MSEDCL due to lack of distribution infrastructure of EDG in that area. In the said case, MSEDCL issues the bill to the Department and the Department issues the same bill to the consumer in addition to other services such as attending any fuse off calls to the consumer, etc. Therefore, an approval is sought from JERC for recovery of Service charges against the billing, collection, etc. provided by the Department which will be equivalent to per unit charge of Employee cost and Administrative & General Cost as proposed below in addition to the power purchase cost:

* - R&M expenses not claimed as no distribution infrastructure of EDG exist

Commission's Analysis:

The Commission has determined the retail tariff for the FY 2017-18 in view of the guiding principles as stated in the Electricity Act, 2003 and the Tariff Policy, 2016, and the suggestions/objections of the stakeholders in this regard and the Petitioner's submission are discussed in the previous Chapters.

The relevant abstract from Tariff Policy, 2016 is as under:

"8.3. Tariff design: Linkage of tariffs to cost of service

It has been widely recognized that rational and economic pricing of electricity can be one

of the major tools for energy conservation and sustainable use of ground water resources.

In terms of the Section 61(g) of the Act, the Appropriate Commission shall be guided by

the objective that the tariff progressively reflects the efficient and prudent cost of supply of

electricity.

The State Governments can give subsidy to the extent they consider appropriate as per

the provisions of section 65 of the Act. Direct subsidy is a better way to support the poorer

categories of consumers than the mechanism of cross subsidizing the tariff across the

board. Subsidies should be targeted effectively and in transparent manner. As a substitute

of cross subsidies, the State Government has the option of raising resources through

mechanism of electricity duty and giving direct subsidies to only needy consumers. This is

a better way of targeting subsidies effectively.

Accordingly, the following principles would be adopted:

1. Consumers below poverty line who consume below a specified level, as prescribed in the

National Electricity Policy may receive a special support through cross subsidy. Tariffs for

such designated group of consumers will be at least 50% of the average cost of supply.

2. For achieving the objective that the tariff progressively reflects the cost of supply of

electricity, the Appropriate Commission would notify a roadmap such that tariffs are

brought within ±20% of the average cost of supply. The road map would also have

intermediate milestones, based on the approach of a gradual reduction in cross subsidy.

3. While fixing tariff for agricultural use, the imperatives of the need of using ground water

resources in a sustainable manner would also need to be kept in mind in addition to the

average cost of supply. Tariff for agricultural use may be set at different levels for different

parts of a state depending on the condition of the ground water table to prevent excessive

depletion of ground water. Section 62 (3) of the Act provides that geographical position of

any area could be one of the criteria for tariff differentiation. A higher level of subsidy

could be considered to support poorer farmers of the region where adverse ground water

table condition requires larger quantity of electricity for irrigation purposes subject to

suitable restrictions to ensure maintenance of ground water levels and sustainable ground

water usage.

4. Extent of subsidy for different categories of consumers can be decided by the State

Government keeping in view various relevant aspects. But provision of free electricity is

not desirable as it encourages wasteful consumption of electricity. Besides in most cases,

lowering of water table in turn creating avoidable problem of water shortage for irrigation

and drinking water for later generations. It is also likely to lead to rapid rise in demand of

electricity putting severe strain on the distribution network thus adversely affecting the

quality of supply of power. Therefore, it is necessary that reasonable level of user charges

is levied. The subsidized rates of electricity should be permitted only up to a pre-identified

level of consumption beyond which tariffs reflecting efficient cost of service should be

charged from consumers. If the State Government wants to reimburse even part of this

cost of electricity to poor category of consumers the amount can be paid in cash or any

other suitable way. Use of prepaid meters can also facilitate this transfer of subsidy to such

consumers.

5. Metering of supply to agricultural/rural consumers can be achieved in a consumer

friendly way and in effective manner by management of local distribution in rural areas

through commercial arrangement with franchisees with involvement of panchayat

institutions, user associations, cooperative societies etc. Use of smart meters may be

encouraged as a cost effective option for metering in cases of "limited use consumers" who

are eligible for subsidized electricity."

Further, keeping in view the relevant directions given by the Hon'ble APTEL in the judgment in O.P. No. 1 of 2011 as mentioned below, the Commission has taken a considered view in this regard.

Directions given by the Hon'ble APTEL in the Judgment in O.P. No. 1 of 2011 are as follows:

1) .........................

2) .........................

3) .........................

Quote

4) In determination of ARR/tariff, the revenue gaps ought not to be left and Regulatory Asset

should not be created as a matter of course except where it is justifiable, in accordance with the

Tariff Policy and the Regulations. The recovery of the Regulatory Asset should be time bound

and within a period not exceeding seven years at the most and preferably within Control Period.

Carrying cost of the Regulatory Asset should be allowed to the utilities in the ARR of the year in

which the Regulatory Assets are created to avoid problem of cash flow to the distribution

licensee.

5) Truing up should be carried out regularly and preferably every year. For example, truing up

for the financial year 2009-10 should be carried out along with the ARR and tariff determination

for the financial year 2011-12.

6) Fuel and Power Purchase cost is a major expense of the distribution Company which is

uncontrollable. Every State Commission must have in place a mechanism for Fuel and Power

Purchase cost in terms of Section 62 (4) of the Act. The Fuel and Power Purchase cost adjustment

should preferably be on monthly basis on the lines of the Central Commission's Regulations for

the generating companies but in no case exceeding a quarter. Any State Commission which does

not already have such formula/mechanism in place must within 6 months of the date of this

order must put in place such formula/mechanism."

The Petitioner has proposed certain changes in the Tariff Schedule which have been discussed in detail in the subsequent paras:

1. Modification in respect of applicability of various categories to include the following:

i. Change in Applicability of Educational Institutions under HT Category

The Commission would like to highlight that these consumers already fall under the HT-Industrial category whose tariff is considerably lower than the tariff of HT- Commercial category. The Commission is of the view that there is no further requirement of reduction in Tariff for these consumers.

ii. Change in Applicability of LT Hotel Industries

The Commission is of the view that fixing of the validity of the certificate is in the purview of the Department of Tourism which is based on prescribed guidelines.

However, the Commission does not find it appropriate to restrict the benefits of this tariff category. The Commission is of the view that the consumers should be eligible for the benefit of tariff category from the start of applicability of the certificate issued by the Department of Tourism and hence the present applicability clause needs a review.

Thus, the Commission modifies the applicability clause of LT Mixed – Hotel Industries as follows:

"This schedule shall apply to Hotels/restaurants with lodging and boarding facilities.

Hotel Industry consumers intending to avail the facility of this tariff should produce a

certificate from the Tourism Department stating that the intending applicant is

registered under Goa Registration of Tourist Trade Act, 1982 and in the Hotel business

on a regular basis. On receipt of the certificate, such tariff shall be made effective from the date of original validity of the certificate. In case of failure to produce the certificate, the same shall be considered under Commercial category."

iii. Recovery of service charges

The Commission is of the view that schedule of miscellaneous charges have already been approved by the Commission for various services. Further, there is no provision of determination of charges for consumers being served by other distribution utilities in the present regulations. The Petitioner is directed to submit a detailed proposal along with citations of relevant regulations/judgements for determination of charges along with the next Tariff Proposal.

8.5 Revenue Gap/Surplus for the FY 2017-18

Petitioner's Submission:

The cumulative revenue gap till the FY 2017-18 is proposed to be met entirely by budgetary support by the Government of Goa of Rs. 149 crores.

Commission's Analysis:

In the Budgetary Support letter No. 1/14/2016-Fin(Bud) issued on 23rd December, 2016, it is stated that:

"I am to state that the Government of Goa has decided to provide the required budgetary

support to meet the total revenue gap as may be approved by the Hon'ble Commission

during the process of finalization of Tariff Petition for the FY 2017-18".

The Commission observes that the Government has not restricted the support to Rs. 149 crore but to the gap as determined by the Commission. Further, the Petitioner has also not sought any tariff hike. Accordingly, the Commission approves the entire revenue gap of560 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 11 (EXTRAORDINARY No. 2) 20TH JUNE, 2017 Rs. 281.65 crore as determined by the Commission in section 5.3 of this Order to be met by the budgetary support by the Government of Goa.

Accordingly, the Commission finds it appropriate to continue with the existing tariff structure in the FY 2017-18 as shown in the following Table:

Table 8.1: Tariff Approved by the Commission for the FY 2017-18

The revenue at approved tariff is tabulated below:

Table 8.2: Revenue at Tariff Approved by the Commission for FY 2017-18