The Commission approves total Annual Revenue Requirement of DHBVNL for FY 2005-06 at Rs. 23485 million. This is equal to total expenditure of Rs. 24191 million minus non-tariff income of Rs. 706 million. The total energy expected to be sold by DHBVNL shall be 6798 million units as against the licensee’s projected sale of 7345.9 million units.

The Commission has maintained its consistent approach of projection of consumption of metered agriculture pump sets on the basis of average Annual Load Factor (ALF) and that of un-metered agriculture pump sets on the pattern of consumption of metered agriculture pump sets. The sale figure of agriculture pump-set consumers for the FY 2005-06 comes to 2035 MU as against 2340.83 MU projected by the Licensee.

The licensee has projected a loss level of 31 % for FY 2005-06. However, as per the past trend, the Commission feels that this may not be achieved by the Licensee. Further, if the sales are projected at 31 % distribution loss level, the corresponding power would not be available in the grid.

Hence the Commission has decided to base the calculation on 32.3% distribution loss, which corresponds to the power available in the grid (provision for which has already been made in the Commission’s order on ARR for transmission and bulk supply business for FY 2005-06 & bulk supply and transmission tariffs dated 10^th May 2005).

The licensee needs to take technical and administrative steps to bring down the distribution loss in the system. The Commission notes that the distribution loss during the last five years (FY 2001 to FY 2005) has remained in a narrow band of over 32% to over 35%, which, by any standards, is a thoroughly disappointing performance.

To promote efficiency as well as to protect the interest of the consumers, the Commission has directed the Licensee to progressively improve efficiency in operation, particularly in the areas where operations are inefficient at present i.e. high distribution losses, high receivables and low collection efficiency. There is urgent requirement to ensure cent percent metering at consumers’ premises and put in place an effective energy audit scheme for proper accounting of energy in the licensee’s distribution and sub-transmission system purposes. There has been inconsistency in the matter of submitting extremely vital data such as distribution losses and category-wise sale of energy for last five years by the licensee. The Commission wishes to convey its anguish at this sorry state of affairs and directs the licensee to develop a credible database which is of immense importance to the Commission and the licensee as well.

There is a necessity to conserve electricity by adopting the DSM measures. This will be beneficial for the Licensee as well as consumers.

Although the Commission has issued several directives to the Licensee to ensure efficient and professional management of the utility, the Commission notes with regret that these have not been fully complied with. Non-compliance of the directives is a serious violation of regulatory authority and cannot be condoned for long. The licensee should, therefore, take up all directives issued by the Commission and make sincere efforts to implement them. The various directions given by the Commission to the Licensee in its previous orders but not yet fully complied with are listed in Annexure – 2 and directives given in this order are listed in Annexure – 3.

The licensee has issued certain sales circular impacting the tariff approved by the Commission. The Commission disallows the adverse financial impact of these sales circulars issued without its approval on the ARR for FY 2005-06. The Commission is of the considered view that the measures covered by these sales circulars can only be implemented by the State Government as per Section 65 of the Electricity Act, 2003. The State Government shall compensate the licensee to the extent of any adverse financial impact of such circulars as long as these circulars remain effective.

The receivables of the Licensee are continuously increasing. The total receivables have increased from Rs. 512.76 crores as on 1.7.1999 to Rs.1250.68 crores as on 30.9.2004. The domestic consumers account for 45.35% of the total receivables as on 30.09.2004. The receivables due from Non-domestic, LT and lift irrigation consumers are also on a higher side.

The licensee needs to establish a State-of-the-art Area Load Despatch Centre without delay for effectively carrying out its operational activities. The timely completion of the project is considered essential keeping in view DHBVNL’s obligation to afford " open access" to its consumers having 15 MVA and above load with effect from 1.10.2006. The project of consumer indexing and GIS mapping which are progressing at a snail’s pace too need to be vigorously pursued to ultimately cover the whole of licensed area. Infact the licensee need to formulate a well-integrated IT policy to harness the benefits that can accrue to it by the Information Technology.

It is about two years that the Commission directed the licensee to introduce pre-paid card meters after ascertaining the merits & demerits/difficulties of such a concept. The licensee has reported no explicable reasons(s) for this apathy. The licensee may frame the scheme and implement it forthwith and without any further delay.

The licensee is required to take steps for implementation of Availability Based Tariff (ABT) in the State by April, 2006 as called for in the National Electricity Policy.

Human resource is an essential partner in developing and executing organisational strategy. Without a planned and systematic approach to Human Resource Management, organisational goals cannot be achieved in an efficient and cost effective manner. The Commission directs the license that its Human Resource Management Plan be expedited.

The Electricity Act, 2003 provides for taking measures conducive to efficient and transparent working of the power sector along with protecting the interests of the consumers. Section 42 of the Act provides for establishing a Forum for redressal of grievances of consumers within 6 months from the appointed date. The licensee has shown no inclination to adhere to the above provision on one ground or the other. The Licensee is also obliged to comply with the regulation on standards of performance and the Electricity Supply Code. The licensee must ensure full compliance of the Act and Commission’s order and regulations.

On the basis of current tariff rates, the licensee is expected to collect revenue of Rs.19179 million. This leaves a net revenue gap of Rs.4306 million, which is to be provided as subsidy by the Government of Haryana for agriculture pump-set consumers. The Government of Haryana has already made a budgetary provision of Rs 12560 million towards subsidy for FY 2005-06 and the amount actually received by the licensee(s) may be adjusted as per the order(s) of the Commission.

This order is signed, dated and issued by the Haryana Electricity Regulatory Commission on November 14, 2005.

Date : 14/11/2005

Place : Panchkula