Section 26(5) of the Haryana Electricity Reform Act, 1997 requires that a licensee shall provide to the Commission, at least 3 months before the ensuing financial year, full details of its calculation for that financial year of the expected aggregate revenue from charges which it believes it is permitted to recover pursuant to the terms of its licence and thereafter it shall furnish such further information as the Commission may reasonably require to assess the licensee’s calculation.
This filing shall provide information on:
(1) the aggregate revenue requirement that the licensee believes it is permitted to recover according to the Sixth Schedule of the Electricity (Supply) Act, 1948, with such modification as may be specified and approved by the Commission, and
(2) the expected revenue at the prevailing tariff rates.
The Licensee shall file annually the Annual Revenue Report (ARR) (1) on or before December 31 of each year, the Licensee shall file an ARR containing the information in respect of the ensuing financial year, the current financial year and the previous financial year. (2)Within 90 days of the date on which the licensee has furnished all the information that the Commission requires, the Commission shall notify the licensee either:-
that it does not consider the licensee's calculation to be in accordance with the methodology or procedure specified and approved by the Commission, and such notice to the licensee shall:
specify fully the reasons why the Commission considers that the licensee's calculation does not comply with the methodology or procedures specified and approved by the Commission or is in any way incorrect, and
propose a modification or an alternative calculation of the expected revenue from charges, which the licensee shall accept.
It is required that separate filings are submitted in respect of (i) transmission and bulk supply and (ii) distribution and retail supply. If it is not possible to provide separately the requested data for these businesses for all three relevant years, a full explanation must be given, and separate data should be provided wherever possible. However, separate data must be provided in all cases for the ensuing financial year.
2.1 Definition
A tariff means a schedule of standard prices or charges (termed ‘rates’), together with terms and conditions for the application of the tariff to a supply of electricity or electricity-related services.
The ARR shall include support for the licensee’s view of the aggregate revenue requirement that it believes it is permitted to recover by providing details of the amounts permitted under the Sixth Schedule of the Electricity (Supply) Act, 1948, with such modification as may be specified and approved by the Commission. This shall be summarised in the form prescribed in Appendix 1, unless the Commission specifies otherwise. In all cases, detailed supporting data and documentation must also be provided which validates the data provided in Appendix 1 by reference to audited data or, where audited data are not available, by reference to other verifiable sources. Full details of any workings or methodologies necessary to derive the data in Appendix 1 from audited or other verifiable data sources must also be provided with the filing. Wherever relevant, details of the required supporting data are to be specified in the appropriate sections below.
The data in Forms 1.1 to 1.6 of Appendix 1 should be provided in the prescribed format. The data in Forms 1.1 to 1.4 should be entered for three years:
Estimated figures for the current financial year. These estimates should be based on actual figures for the first six months of the current financial year and estimated figures for the second six months of the current financial year. The estimated figures for the second half of the current financial year should be based on actual audited figures of the second half of the previous financial year with adjustments that reflect known and measurable changes expected to occur between them. These adjustments must be specifically documented and justified.
Forecast figures for the ensuing financial year. These figures should be based on the current year figures, with adjustments that reflect known and measurable changes expected to occur between them. These adjustments must be specifically documented and justified.
Form 1.1 specifies calculation of the capital base, following XVII (1) of the 6th Schedule. The licensee shall provide full details of calculation of each capital base item and enclose supporting financial and technical data for all relevant financial years.
The Commission requires that the item No. XVII(1)(ii) of the 6th Schedule should also include the amount of subventions from the State Government. The purpose of this change is to prevent the licensees from earning a return on subventions from the State Government. This change will be appropriate, since the licensee is not entitled to earn a return on assets that it did not purchase.
Form 1.1 shall be provided separately for the capital base applying to three periods, those being:
That part of the capital base which relates to investments made between 31 March 1965 and the date of the commencement of the Electricity Laws (Amendment) Act 1991; and
That part of the capital base which relates to investments made after the date of the commencement of the Electricity Laws (Amendment) Act 1991.
Form 1.2 calculates the reasonable return of the licensee, as specified in sections XVII(9) and (10) of the 6th Schedule. The capital base and standard rates used depend on the age of investments involved, as defined in section XVII (10) of the 6th Schedule.
3.3 Revenue Requirement Form 1.3: Expenditure
Form 1.3 broadly follows sections XVII(2)(b) and (c) of the 6th Schedule. The licensee shall provide full details of calculation of each expenditure item and enclose supporting financial and technical data for all relevant financial years. It should be noted that the assumptions used regarding fuel prices in the item "purchase of energy" must be consistent with those used in the calculation of the Fuel Surcharge in Appendix 2. Additional data requirements in respect of employees are specified in Forms 1.3 and 1.3A.
3.4 Revenue Requirement Form 1.4: Non-tariff income
Form 1.4 calculates the income of the licensee from sources other than the tariff. It follows section XVII(2)(a) of the 6th Schedule with the exception of item No. XVII(2)(a)(i) "gross receipts from sale of energy, less discounts applicable thereby". In addition, total receipts in the form of surcharges for late payment are to be included in this form as a separate item. The resulting total of non-tariff income shall be deducted from the total revenue requirement to calculate the net tariff revenue requirement.
3.5 Revenue Requirement Form 1.5: Customer Rebates Owed from Previous Year
Form 1.5 calculates revenues that are overcharged in one year to be returned to the customers by the licensee when tariffs are next re-set. The adjustment is described in section II of the 6th Schedule. Form 1.5 defines the information needed to calculate the amount that should be added to the customer rebate account for the previous financial year. The previous year shall be used in preference to the current financial year, because audited data will not be available for the current financial year.
3.6 Revenue Requirement Form 1.6: Aggregate Revenue Requirement
Form 1.6 calculates the resulting aggregate revenue requirement that the licensee believes it is permitted to recover from tariffs under the 6th Schedule in the ensuing financial year.
The ARR shall include a calculation of the expected revenues from tariff charges by applying tariff prices to quantities supplied. This may be made in the form of a statement in the form indicated in Appendix 2. This should include a statement of the forecast quantities supplied under each rate for the ensuing financial year. The quantities, together with prices, shall be capable of providing the revenue recoverable under each rate and hence in aggregation the total recoverable revenue from tariffs for the year. The statement shall also include a statement of the units assumed to be consumed by unmetered supplies related to a parameter of the supply.
If divergence between the aggregate revenue requirement and the expected revenues for the ensuing financial year is significant, the ARR shall include a statement of how the licensee proposes to deal with this divergence.
The revenue filing shall include a detailed statement of transmission and distribution losses.
Transmission loss figures should be submitted as shown in Forms 3.1, 3.2 and 3.3 of Appendix 3, including metering status reports. These forms should be completed for the following three periods: i) the first six months of the previous financial year, ii) the second six months of the previous financial year, and iii) the first six months of the current financial year.
Distribution loss figures should be broken down as between sub-transmission and LT losses, and as between technical and non-technical losses. Calculations should refer to the energy sold to consumers and the method of calculation must be fully specified. All information should be provided for the following three periods: i) the first six months of the previous financial year, ii) the second six months of the previous financial year, and iii) the first six months of the current financial year.
Reductions in transmission and distribution losses are an important objective under section 26(2)(b) and (c) of the Act. Revenue and tariff determinations will need to take account of such reductions. The licensee must provide plans for reducing losses, both technical and non-technical, together with relevant load flow studies and details of the investment required to achieve the planned reductions. Plans for strengthening energy audit shall be also included. All such plans should be presented time-wise, commencing with the ensuing financial year and covering at least the following five years. They should be substantiated by relevant analysis as to achievability and cost.
The Commission may require the licensee to provide any additional information necessary to assess the licensee’s filing. In particular, the licensee must provide reports on the following as part of this filing:
Plans for undertaking load research to determine the load profile of consumers supplied under each tariff. This is an essential requirement if future tariffs are to reflect costs.
Plans to improve the system power factor by providing an incentive for consumers to install correction capacitors.
Plans for determining the relationship between kWh consumed and the connected loads on which unmetered charges are based.
Programme for converting unmetered connections to metered supply, together with investment needed.
Method of assessing consumption when meter is not installed or is defective, together with basis for such assessment.
Plans, both short-term and long-term, for rationalization of existing manpower.
Paragraph 26 (2) (b) of the Haryana Electricity Reform Act, 1997 stipulates that, while designing the tariff, the licensee should consider the factors which would encourage efficiency, economic use of the resources, good performance, optimum investments and other matters which the Commission considers appropriate keeping in view the salient object and purposes of the provisions of this Act, besides keeping in view the interest of consumers.
Reports are required as applicable on the following performance indicators for the most recent three years:
Periods when voltage and/or frequency was beyond the prescribed limits on transmission and primary distribution (33 kV, 11 kV) networks. Details of steps proposed to improve performance and monitoring
Number of supply or connection applications pending for more than six months, categorised by the reason why.
Numbers of fatal and non-fatal accidents reported during last 3 years, differentiating between accidents involving humans and those involving animals. An analysis of steps to reduce such accidents must also be provided.
Numbers of inadequate or defective meters. Programme and phasing of investment for replacements.
Number of unauthorised connections (as a result of sample survey) to be reported by tariff category. Measures adopted to curb unauthorised consumption. Results and programme for the future.
Amount of revenue arrears at beginning and end of year analysed age-wise on a six-monthly basis. Reasons for non-collection and details of litigation involving collection of revenue of Rs50,000 or more should also be provided.
Data should be provided for each consumer category indicating (i) the normal meter reading cycle and the number of meter readings not carried out in accordance with that cycle, and (ii) the number of consumer bills not served within 15 days of the meter reading. Please also provide details of plans to improve the efficiency and punctuality of meter reading, the dispatch of consumer bills, and cash collection.
Items in the following Forms are cross-referenced to paragraphs in section XVII of the 6th Schedule of the Electricity (Supply) Act, 1948. For convenience, shorter wording has been used in here compared to the 6th Schedule. For the purpose of application of the Guidelines, the full wording of the 6th Schedule shall be used.
Revenue
Requirement Form 1.1: Capital Base
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| Ref. | Data Required |
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1.
(a)
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Original cost of fixed asset (excluding consumers contributions) | |||
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(b)
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Cost of intangible assets | |||
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(c)
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The original cost of work in progress | |||
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(d)
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The amount of investment compulsorily made under para-IV of the 6th Schedule | |||
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(e)
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An amount on account of working capital equal to the sum of: | |||
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(e)
(i)
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Average cost of stores (1/12th of the sum of the stores materials and suppliers including fuel in hand at the end of each month of the year) | |||
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(e)
(ii)
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Average cash and bank balance (1/12th of the sum of cash and bank balance whether credit or debit and call and short term deposits at the end of each month of the year) | |||
| Sub-total of positive elements of Capital Base |
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Less
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i)
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The amounts written off or set aside on account of depreciation of fixed assets. | |||
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ii)
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The amount of any loan or subvention from the State Government. | |||
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ii-a)
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The amount of any loans borrowed from organisations or institutions approved by the State Govt. | |||
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ii-b)
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The amount of any debenture issued by the licensee. | |||
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iii)
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The amounts deposited in cash with the licensee by consumers, by way of security. | |||
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iv)
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The amount standing to the credit of Tariffs and Dividends Control Reserve at the beginning of the year of account. |
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v)
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The amount standing to the credit of the Development Reserve at the close of the year. | |||
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vi)
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The amount carried forward (at the beginning of the year of accounting) in the accounts of the Licensee for distribution to the consumers. |
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| Sub-total of negative elements of Capital Base | Sum of above | |||
| Net Capital Base | net figure (first sub-total above minus the second) | |||
Revenue
Requirement Form 1.2: Reasonable Return
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| Ref. | Data Required |
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10
(b)
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Reserve Bank rate used in the calculations below | |||
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9
(a)
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Capital base at the beginning of the year in question (from Form 1.1) applying before 31st March 1965 multiplied by 7% | |||
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9
(a)
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Capital base at the beginning of the year in question (from Form 1.1) applying between 31/3/1965 and 1/10/91 multiplied by (Reserve Bank rate + 2%) | |||
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9
(a)
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Capital base at the beginning of the year in question (from Form 1.1) applying after 1/10/91 multiplied by (Reserve Bank rate + 5%) | |||
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9
(b)
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Income from investments, other than those investment compulsorily made under para-IV | |||
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9
(c)
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The amount of any loans advanced by the State Government multiplied by one-half of one per centum. | |||
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9
(c-1)
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The amount of any loans borrowed from organisations or institutions approved by the State Govt. multiplied by one-half of one per centum | |||
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9
(c-2)
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The amount of any debenture issued by the licensee multiplied by one-half of one per centum | |||
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9
(d)
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The amount standing to the credit of the Development reserve at the close of the year multiplied by one-half of one per centum | |||
| Total Reasonable Return | sum of the above items | |||
Revenue
Requirement Form 1.3: Expenditure
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| Ref. | Data Required |
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| Expenditure properly incurred on : | ||||
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2
(b) (i)
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Purchase of energy | |||
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2
(b) (ii)
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Transmission or distribution and sale of energy (broken down as follows) | |||
| 1. Wages, salaries, other allowances and benefits (including bonuses) of regular employees of the company. Note: please also provide the breakdown shown in Form 1.3a. | ||||
| 2. Other expenditure relating to the transmission or distribution and sale of energy | ||||
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2
(b) (iii)
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Rents, rates & taxes, other than all taxes on income and profit | |||
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2
(b) (iv)
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Interest on loans advanced by the State Government | |||
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2
(b) (iv-a)
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Interest on loan borrowed from organisation or institutions approved by the State Government | |||
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2
(b) (iv-b)
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Interest on debenture issued by licensee | |||
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2
(b) (v)
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Interest on security deposit | |||
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2
(b) (vi)
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Legal charges | |||
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2
(b) (vii)
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Bad debts | |||
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2
(b) (viii)
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Auditors fees | |||
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2
(b) (x)
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Depreciation | |||
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2
(b) (xi)
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Other expenses | |||
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2
(b) (xii)
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Contribution to provident fund, staff pension and gratuity | |||
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2
(b) (xii-a)
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Expenses on apprentice & other training scheme | |||
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Note
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Management expenses (including remuneration of directors) and bonuses should be included in the wages, salaries, other allowances and benefits item above | |||
| Total "expenditure before special appropriations" |
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| Special appropriation to cover : | ||||
| 2 (c) (i) | Previous losses | |||
| 2 (c) (ii) | All tax on income and profits | |||
| 2 (c) (iii) | Installments of written down amounts in respect of intangible asset and new capital issue expenses | |||
| 2 (c) (iv) | Contribution to contingency reserve | |||
| 2 (c) (v) | Contribution towards arrears depreciation | |||
| 2 (c) (v-a) | Contribution to Development Reserve | |||
| 2 (c) (v-b) | Debt redemption obligation | |||
| 2 (c) (vi) | Other special appropriation. | |||
| Total "special appropriation" |
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| Total "expenditure" (including special appropriation) | ||||
Revenue
Requirement Form 1.3a: Employment Data
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- | ||||
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Board of directors | - | - | - | - | - | - | - | - | - |
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Support staff of Board of Directors | - | - | - | - | - | - | - | - | - |
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2
(a)
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Technical | - | - | - | - | - | - | - | - | - |
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2
(b)
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Administrative | - | - | - | - | - | - | - | - | - |
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2
(c)
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Accounts and finance | - | - | - | - | - | - | - | - | - |
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2
(d)
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Other (please specify) | - | - | - | - | - | - | - | - | - |
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All other Staff | - | - | - | - | - | - | - | - | - |
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3
(a)
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Technical | - | - | - | - | - | - | - | - | - |
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3
(a) (i)
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Officers | - | - | - | - | - | - | - | - | - |
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3
(a) (ii)
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Staff | - | - | - | - | - | - | - | - | - |
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3
(b)
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Non-technical | - | - | - | - | - | - | - | - | - |
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3
(b) (i)
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Administrative | - | - | - | - | - | - | - | - | - |
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3
(b) (i.i)
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Officers | - | - | - | - | - | - | - | - | - |
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3
(b) (i.ii)
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Staff | - | - | - | - | - | - | - | - | - |
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3
(b) (ii)
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Accounts and finance | - | - | - | - | - | - | - | - | - |
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3
(b) (ii.i)
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Officers | - | - | - | - | - | - | - | - | - |
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3
(b) (ii.ii)
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Staff | - | - | - | - | - | - | - | - | - |
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3
(b) (iii)
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Others (please specify) | - | - | - | - | - | - | - | - | - |
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3
(b) (iii.i)
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Officers | - | - | - | - | - | - | - | - | - |
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3
(b) (iii.ii)
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Staff | - | - | - | - | - | - | - | - | - |
| - | - | - | - | - | - | - | - | - | ||
| Total employment data | - | - | - | - | - | - | - | - | - | |
Note:
Form 1.3a should include all employment remunerations for the years, whether capitalised or non-capitalised.
All numbers of employees should be given on a consistent start-of-year or year-end basis.
The Cost
columns should include remunerations for actual employees, not sanctioned
employees.
Revenue
Requirement Form 1.4: Non-Tariff Income
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| Ref. | Data Required |
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| Non-tariff income derived from : | ||||
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2
(a) (ii)
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Rental of meters and other apparatus hired to consumers | |||
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2
(a) (iii)
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Sale & repair of lamps and apparatus | |||
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2
(a) (iv)
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Rents | |||
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2
(a) (v)
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Transfer fees | |||
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2
(a) (vi)
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Interest on investment | |||
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2
(a) (vii)
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Other general receipts accountable for income tax and arising from and ancillary or incidental to business of electricity supply. | |||
| Revenue from surcharges for late payment | ||||
| Total of "Non-tariff Income" | sum of above | |||
Revenue
Requirement Form 1.5: Customer Rebates Owed from Previous Year
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| Ref. | Data Required |
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| Income: | ||
| 2 (a) (i) | Tariff income | |
| Non-tariff income | from Form 1.4 | |
| minus total expenditure (including special appropriation) | from Form 1.3 | |
| Clear Profit for audited year | total income minus total expenditure (including special appropriation) | |
| Reasonable Return for audited year | from Form 1.2 | |
| Excess of Clear Profit over Reasonable Return (if any) for audited year | Clear profit minus reasonable return (if positive) | |
| II. (1) | Amount to be added to the rebate account (if any) | Calculated from the above according to para II of the 6th Schedule |
Revenue
Requirement Form 1.6: Aggregate Revenue Requirement
| Ensuing year | |
| Data Required | Projected |
| Rs. in Crores | |
| Reasonable return |
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| Total expenditure |
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| Minus Non-tariff income |
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| Minus outstanding customer rebates |
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| Total Aggregate Revenue Requirement |
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