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

CASE NO: HERC/PRO –5 of 2003

Date of Order: 08-03-2004

In the matter of Transmission and Bulk Supply ARR 2004-05 and Bulk Supply and Transmission Tariffs for FY 2004-05 filed by Haryana Vidyut Prasaran Nigam Limited (HVPNL) on 31/12/2003.

ORDER

Under Section 64 (3b) of the Electricity Act 2003 viz “ reject the application for reasons to be recorded in writing if such application is not in accordance with the provisions of this Act and the rules and regulations made there under or the provisions of any other law for the time being in force: Provided that an applicant shall be given a reasonable opportunity of being heard before rejecting his application,” the Commission, vide its letter no. 9971/S/HERC/SV-TBS/2004 dated 19^th February 2004 intimated HVPNL (the applicant) that a hearing is scheduled on the captioned subject on 03/03/2004 at 03.00 P.M. in the conference hall of the Haryana Electricity Regulatory Commission.

The hearing was held as per the schedule.

The Commission, after hearing the oral submissions of HVPNL and the Staff of the Commission, observes as under:

(1)   The Government of Haryana notification No. 1/10/2003-1 Power dated 9/12/2003, received in the Commission’s office on 12/02/2004, declares Haryana Vidyut Prasaran Nigam Limited (HVPNL) as the Haryana State Transmission Utility (STU) under Sections 39 (1) of the Electricity Act 2003. Section 39(1) also provides Viz. “….the State Transmission Utility shall not engage in the business of trading in electricity”. It thus follows that HVPNL cannot handle bulk supply/trading in electricity with effect from 9/12/2003.  

(2)    The Government of Haryana is yet to decide the manner and the shape in which the bulk supply/trading in electricity will be handled in view of the action at 1 above.

(3)    The Commission is of the considered view that an order on Joint Transmission and Bulk Supply ARR and Tariffs for FY 2004-05, if issued by the Commission, would have legal and technical constraints keeping in view the transitional and other relevant provisions of the Electricity Act 2003.  A part of the said order relating to Bulk Supply would become defunct. The entity/arrangements, which would take over Bulk Supply business, have not yet been established. Further, the desegregation of revenue between Transmission business and Bulk Supply business, which forms the basis of Transmission Tariffs and Bulk Supply Tariffs is based on cost allocators developed by HVPNL. These allocators may not be acceptable to the new entity/arrangements yet to be established.

          The Commission is seized of the issues like treatment of power purchase volume and cost thereof to the distribution companies. Section 86 (j) of the Electricity Act 2003 (functions of the State Commission) provides that the Commission shall “fix trading margin in the intra-state trading of electricity, if considered necessary”. This effectively means that a mechanism may have to be put in place to ‘pass through’ the distribution companies’ power purchase cost or determine trading margin or determine bulk supply tariff depending upon the Government of Haryana’s decision. 

        In view of the above mentioned uncertainties and subjectivities, the Commission rejects the ARR for FY 2004-05 and Bulk Supply and Transmission Tariffs application filed by HVPNL for its Transmission and Bulk Supply business and directs the licensee to submit a fresh Tariff Petition supported by revenue requirement pertaining to Transmission / Wheeling business only.

        SLDC charges also needs to be separately worked out by HVPNL, as the Government of Haryana vide its Notification No. 1/11/2003-1 power dated 9/12/2003, under Section 31 of the Electricity Act 2003, entrusts the responsibity of State Load Despatch Centre (SLDC) to it.

(4)    The bulk supply / trading in electricity will be handled by the new entity/ distribution utilities as per the decision of Government of Haryana and the appropriate documents / proposals be submitted by the said entity / distribution utilities to the Commission for consideration and order. 

This order is signed, dated and issued by the Haryana Electricity Regulatory Commission on this 8^th day of March 2004.

Place:- Panchkula