HARYANA ELECTRICITY REGULATORY COMMISSION
SCO 180, SECTOR 5, PANCHKULA 134 109, HARYANA

CASE No. : HERC/ PRO – 6 of 2004

Date of Order : 9th March 2004

In the matter of Annual Revenue Report (ARR) application for the financial year 2004-05 filed by Haryana Vidyut Prasaran Nigam Limited (HVPNL) with respect to its Distribution & Retail Supply Business on 31.12.2003.

ORDER

The Haryana Vidyut Prasaran Nigam Limited (HVPNL), the D&RS Licensee, filed its Annual Revenue Report for FY 2004-05 on 31^st December 2003. In the ARR application, the licensee has calculated a revenue gap of Rs. 3633 million and has submitted no proposal to deal with it.  The licensee has contented that the requisite proposal (to deal with the revenue gap) would be submitted after approval of the ARR by the Commission.

As per Section 64 (1) of the Electricity Act, 2003, an application for determination of tariff under Section 62 is required to be made by the licensee in such manner as may be determined by regulations. Under regulation 2(d) of the HERC (Tariff) Regulations, 1999, the ARR application should contain the Licensee’s general explanation of how it proposes to deal with any significant divergence between the revenue and cost figures provided in the ARR filing.

The Commission vide its Memo No. HERC/9772-9774, dated 19^th February 2004 scheduled a hearing on the captioned subject on 3.3.2004 at 3:00 PM in the conference hall of the Haryana Electricity Regulatory Commission. Under Section 64(3)(b) of the Electricity Act, 2003, the Commission can reject the application for reasons to be recorded in writing if such application is not in accordance with the provisions of the this Act and the rules and regulations made there under or the provisions of any other law for the time being in force. It has also been provided that an applicant shall be given a reasonable opportunity of being heard before rejecting his application.

The hearing was held as per schedule. 

The Commission, after hearing the oral submission of the Distribution and Retail Supply Licensee and the staff of the Commission, observes as under:

(1)   The ARR application made by the licensee does not comply with the provisions of the Electricity Act 2003 as well as the Haryana Electricity Regulatory Commission (Tariff) Regulations, 1999.  Thus, the Commission opines the filing to be incomplete, as any proposal for treatment of revenue gap has not been submitted by the Licensee. Further, the Commission is of view that the suggestions and objections sought from the public by the Licensee as required under Section 64 (3) of the Electricity Act, 2003 was not justifiable as the treatment of revenue gap was not indicated in the filing made public.         

(2)    It has been mentioned in the ARR application that the cost of power purchase by Distribution & Retail Supply Licensee from Transmission & Business Supply Licensee for FY 2004-05 has been calculated on the basis of the Bulk Supply Tariff application filed by HVPNL with the Commission. The Commission has rejected the ARR and Bulk Supply Tariff application for Transmission & Bulk Supply Licensee (HVPNL) for FY 2004-05 and directed the Licensee to file a fresh tariff application keeping in view its role of Haryana State Transmission Utility notified by the Government of Haryana vide its notification No. 1/10/2003- I Power, dated 9.12.2003.  Therefore, the power purchase cost may change for the Distribution & Retail Supply Licensee. 

(3)    During the course of hearing on 3.3.2004, major deficiencies in the ARR application for Distribution & Retail Supply business were brought to the notice of the Licensee for appropriate follow up while submitting the fresh filing on the subject.

In view of the above-mentioned issues, the Commission rejects the ARR application for Distribution & Retail Supply business for FY 2004-05 and directs the Licensee to file a fresh ARR application with full details as required in the Electricity Act, 2003 and the applicable regulations.

The licensee is further directed to provide full details about its Power Purchase & Procurement process as required under Section 86 (b) of the Electricity Act, 2003.

This order is signed, dated and issued by the Haryana Electricity Regulatory Commission on this 9^th day of March 2004.

Place : Panchkula
Dated :  9^th March 2004