View
10
Download
0
Category
Preview:
Citation preview
1 | P a g e
BEFORE THE HARYANA ELECTRICITY REGULATORY COMMISSION AT PANCHKULA
Case No. HERC/RA-10 of 2015 & Case No. HERC/RA-11 of 2015
Date of Hearing: 07.10.2015 Date of Order: 15.10.2015 In the matter of Review Petition against the Commission’s Order dated 7th May, 2015 on True Up of the ARR for the FY 2013-14, Annual Performance Review for the FY 2014-15 and determination of Distribution and Retail supply tariff for the FY 2015-16 for Uttar Haryana Bijli Vitaran Discoms Limited (UHBVNL) and Dakshin Haryana Bijli Vitaran Discoms Limited (DHBVNL).
And in the matter of
1. Shri Sampat Singh, House No. 112, Sector-15, Hisar & Others Petitioner 2. Delhi Metro Rail Corporation Limited (DMRC), New Delhi Petitioner
Vs.
1. Uttar Haryana Bijli Vitran Discoms (UHBVNL), Panchkula Respondent 2. Dakshin Haryana Bijli Vitran Discoms (DHBVNL), Hisar Respondent
QUORUM Shri Jagjeet Singh, Chairman Shri M.S. Puri, Member
ORDER
1. Both the Review Petitions preferred by the parties i.e. Shri Sampat Singh and
DMRC are arising out of the same Order dated 7th May, 2015. Hence, the Commission
considered it appropriate to hear them together and dispose of vide a common Order.
Further, as the review / relief sought by the parties have wider ramification on the ARR/
distribution and retail supply tariff(s) determined by the Commission for the FY 2015-16
w.e.f 1st April, 2015, general public/stakeholders were also invited to participate in the
proceedings.
2 | P a g e
2. Brief background of the Case
The Commission, in exercise of the powers vested in it under section 62 of the
Electricity Act, 2003 read with section 11 of the Haryana Electricity Reforms Act, 1997
and all other enabling provisions in this behalf, had passed the Order dated 7th May,
2015, determining the truing-up of the ARR for the FY 2013-14 Annual (Mid-year)
Performance Review for the FY 2014-15 and Aggregate Revenue Requirements /
Tariffs of UHBVNL and DHBVNL for their Distribution and Retail Supply Business under
MYT framework for the FY 2015-16 in accordance with the provisions of Haryana
Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for
Generation Transmission, Wheeling and Distribution & Retail Supply under Multi Year
Tariff Framework) Regulations, 2012 . The Commission, while passing the said Order,
had considered the true-up for the FY 2013-14, APR for the FY 2014-15 and revised
ARR for the FY 2015-16 Petitions filed by UHBVNL and DHBVNL along with
subsequent filings/additional data provided by them including filings made by the two
Utilities in response to the various queries of the Commission, objections received from
various organisations and individuals as well as the suggestions of the SAC Members in
the meeting held on 26.02.2015.
3. Aggrieved by the ibid Order passed by the Commission, Shri Sampat Singh and
DMRC, through Shri Satish Chandra , General Manager, DMRC, have preferred the
present petition(s) seeking review of the said Order. A gist of the review sought by the
petitioners (Supra.) and a few other parties, in response to the public notice issued by
the Commission, is presented below.
4. Petition filed by Shri Sampat Singh, Hisar, dated 27th July, 2015
At the outset Shri Singh had prayed to the Commission “to condemn (sic) the
delay caused inadvertently” in filing the present review petition vis-à-vis the limitation
period specified for the purpose by the Commission.
It has been submitted by the Petitioner that the impugned Order was passed by
the Commission on 07.05.2015. However, the same was given retrospective effect i.e.
from 01.04.2015. This has caused additional financial burden on the electricity
consumers of the State and is against the natural law of justice as any levy or
3 | P a g e
enhancement has to be prospective and not retrospective. It has been submitted, with
illustrations, that the claims of HERC regarding telescopic DS tariff is false and
erroneous.
That the accumulated losses of both the Discoms are more than over Rs.27,000
Crore. The Discoms, instead of improving their financial health, are blaming consumers,
Government and the HERC. It is only the inefficiency, incapability, lack of will power,
authority without accountability which is to be blamed. Ultimately sufferers of the losses
are poor and helpless consumers who are paying the enormous and unbearable bills.
The Discoms have adopted the easy way to get loans to make up for their financial
losses. The amount of total loan, as on 31.03.2015, has crossed Rs. 31,069 Crore. i.e.
Rs.19,059 Crore against UHBVNL and Rs.12,010 against DHBVNL. Hence, due to
interest burden, the poor consumer is to pay Rs.1.50 per unit towards this. Further, the
defaulting amount from various consumer categories is about Rs.6000 Crore. Instead of
recovering these amounts, the receivable amounts are increasing every year. Ultimately
the sufferer is the honest and regular payer of electricity bills.
That for the FY 2014-15 and FY 2015-16, the distribution losses of UHBVN &
DHBVN have been fixed as 25% and 23% and that of DHBVN are 24% and 21.96 %
respectively for both the years. If we go through actual AT&C losses, they are more
than 33%. In the neighbouring State of Punjab the AT&C losses are only 15%. It means
that the losses of Discoms of Haryana are 18% more than the 15% of Discoms of
Punjab. Discoms will again go to banks for securing loans to make up these losses and
in turn the consumers will pay either by tariff increase or facing number of FSA's. 1%
loss is loss of Rs.300 crore, so due to AT&C losses, total losses annually would be
more than Rs.5400 crore. It has been suggested that the Discoms may introduce
“Patiala Model” to bring down the aggregate transmission and commercial (AT&C)
losses
That the never ending FSA is imposed only in Haryana. FSA has no place in any
neighbouring States like HP, J&K, Punjab, UP, Uttarakhand, Chandigarh, Delhi,
Rajasthan etc. The helpless consumers are at the mercy of the monopoly of the
Discoms in the case of FSA. Sometime FSA is imposed and withdrawn and again
4 | P a g e
imposed. It has been further submitted that M/s Adani was paid Rs.727 Crore more
than the decision of the HERC. Similarly, Pragati Bhawna Gas was paid Rs.550 Crore
more than the amount decided by the HERC. FSA is an additional amount of power
purchase that is recovered in addition to the tariff on per unit basis from the power
consumers. Mostly these FSAs emerge from unavoidable variation in the costs of the
power generators in terms of variation in coal/fuel prices and it is a part of tariff itself.
Contrary to this the prices of coal and fuel have been decreasing day-by-day but still the
never ending FSAs, including holding cost are being imposed on consumers because of
the monopoly of the Discoms.
On the issue of AP Subsidy, it has been submitted by the Petitioner that the
HERC has approved Rs.6200 crore for agriculture subsidy which is to be paid by the
State exchequer i.e. public money. This subsidy is excluding the share money of FSA.
In Punjab, for the FY 2015-16, 10264 MUs have been estimated for the AP consumers
by the Punjab Electricity Regulatory Commission. Subsidy of Rs.4700 crore has been
approved for AP consumption by the Commission for the FY 2015-16. It is very strange
that power purchase for AP consumers in Punjab has been decided as 10264 MUs
which is 20% more than that of Haryana 8571 MUs but at the same time the subsidy
approved by HERC is Rs. 6200 crore as against that of Punjab Rs. 4700 crore i.e. 32%
more than that of the Punjab. Moreover actual power consumption of AP power in
Punjab is 50% more than that of Haryana. So the actual figures of Haryana are doubtful.
The calculation of subsidy of Haryana cannot be justified at any cost. How can we
provide subsidy from our public exchequer i.e. more subsidies for less supply?
The Petitioner has further raised the issue of implementation of HVDS system in
AP at a cost of Rs.1168.07 Crore with no corresponding benefit in terms of reduction in
theft of power, improvement in voltage etc. Additionally, the issue of dubious purchase
of transformers for HVDS and expenditures of about Rs. 3000 Crore under Restructure
Accelerated Power and Power Development & Reform Program has also been raised
by the Petitioner. He also suggested that the comments given by Mr. H.L. Bajaj and Mr.
Anshul Yadav in the SAC Meeting were very valuable but no action has been taken by
the Discoms on their suggestions.
5 | P a g e
That the Discoms have never cared for the implementation of directives of the
Commission given in different tariff Orders on the issues including Power Purchase
Cost and PPA, replacement of dead, defective, slow meters, inventory & receivable
management, release of pending connections, liquidating of outstanding receivables,
reduction in feeders having high losses etc. The Petitioner also objected to the amount
allowed by the Commission on account of true-up of ARR for the FY 2013-14 in respect
of O&M expenses, Interest on FRP borrowings and cost of raising finance and bank
charges as well as depreciation.
Appeal
“I would request the HERC to accept my review petition and withdraw its tariff
Order. I would also request the HERC to call me and give me an adequate hearing for
more explanation”.
5. Petition filed by DMRC, New Delhi, dated 27.08.2015
The petitioner, M/s DMRC has submitted as under: -
That despite the submissions of DMRC dated 26.12.2014 as well as their
arguments in the public hearing held on 13.02.2015, their tariff including demand
charges in the FY 2015-16 has been increased by the Commission and has been
brought at par with that of the Railways (traction supply). By creating the parity in the
impugned Tariff Order, the Commission has changed its own stand and hence the rate
of increase in tariff of DMRC is much higher as compared to the Railways thereby the
DMRC has been saddled with additional financial burden of about Rs. 1.8 Crore more
than the Railways on account of tariff. Further, it was submitted that the increase in the
tariff for all other consumer categories ranged between 25 Paisa / unit to 35 Paisa / unit
while in the case of DMRC the increase of 60 Paisa / unit is about double the increase
in tariff in any HT category of the impugned Order.
That DMRC was made a special category due to its unique nature by this
Commission in its Tariff Order for the FY 2010-11. Further, a similar stand was taken
by the Commission in its Tariff Order for the FY 2011-12, FY 2012-13 and the FY 2014-
15 while fixing the tariff for the DMRC. However, the Commission while deciding tariff
6 | P a g e
payable by the DMRC in the FY 2015-16, has changed its own stand putting additional
financial burden on the DMRC.
That in accordance with Section 62(3) of the Electricity Act, 2003, differentiation
between consumers can be done on the basis of consumers load factor, power factor,
voltage, total consumption of electricity during any specified time at which supply is
required or geographical position of any area, nature of supply and purpose for which
supply is given. It has been submitted that DMRC takes electricity supply at EHV i.e. 66
kV and it does not contribute to the losses of the Discoms below 66 kV. All losses within
DMRC’s network is borne by DMRC itself. Further, DMRC’s load factor is also
moderately high and is 57% on 24 hours scale and 76% for working hours. Additionally,
DMRC has adopted most efficient technologies in designing its system since conceptual
stage, hence, its power factor is close to unity.
In addition to the above DMRC brought out the various advantages as a public
utility including environment i.e. regeneration of power and carbon credit thereto, de-
congestion of the heavy traffic areas in Delhi and conservation of electricity. The
Petitioner, in support of its prayers including demand for separate tariff lower than the
Railway (traction) has also cited Section 61 of the Electricity Act, 2003.
The Petitioner also prayed that during power extension to Delhi area from
HCC/RSS during power failure of Delhi Discoms, the actual / maximum demand may
not be made applicable for DMRC and such actual / maximum demand during this
period of power extension needs to be ignored.
6. Objections / Comments filed by Consumers / Associations
In addition to the above review petitions, quite a few other stakeholders also filed
their submissions. Lists of such petitioners and the issues raised by them are as under:-
i. Panipat Kambal Mfg. Association through Shri Varinder Rawal, Secretary.
ii. Chamber of Textile Manufacturers Association, Panipat, through Shri
Rakesh Chugh, President.
iii. Consumers Association, Panchkula through its President / General
Secretary.
7 | P a g e
iv. Citizens Welfare Association, Panchkula through Shri S.K. Nayar,
President.
v. Industrial Estate Association, Panipat through Shri Bhagwan Aggarwal,
General Secretary.
vi. Jt. Action Forum of Residents Association, Gurgaon through Col. Ratan
Singh, Chairman.
vii. Shri Abhay Jain, Social Worker, Gurgaon.
viii. Shri Dalip singh and 26 Others, Panchkula.
ix. Shiv Sena Parliamentary Party, New Delhi through Prof. Satya Pal Gupta,
Office Secretary.
x. Shri Upkar Singh Verma, AO, Al-Falah School of Engg. & Tech.
xi. Shri N.K. Garg, Chairman, Confederation of RWAs, Faridabad.
xii. Shri Ajay Parashar (email dated 10.08.2015)
In brief, the above interveners have objected to introduction of the following
besides pointing out the inefficiencies of the Discoms including high line losses and
non-compliance of the Orders / directives issued by the Commission leading to
abnormal rise in tariff:-
i. Introduction of kVAh based billing system without having requisite
infrastructure and without any advance notice to the consumers.
ii. Levy of Sundry Charges without providing the details.
iii. Voltage issue at Discoms end impacting Power Factor at the consumers
end.
iv. Non Payment of interest on ACD.
v. Non Levy of Fixed Charges during April to July 2015 as per the Order
dated 7th May, 2015.
vi. Fuel Surcharge Adjustment (FSA) being illegally recovered by the
Discoms.
vii. The average cost of power purchased by the Discoms is Rs. 2.50/unit as
against this the DS consumers having consumption of 501 units/month are
made to pay Rs. 8.50/units which is in violation of the fundamental
principle that extra charges / taxes cannot be in excess of 20% of the
principal amount.
viii. Consumer Meters are running fast, preparation and distribution of bills are
not as per HERC guidelines.
8 | P a g e
ix. Losses have increased despite spending a lot of money on bifurcation of
feeders.
x. There is no justification for increase in tariff as cost of fuel (oil and coal)
have declined sharply.
xi. Monthly bills should be issued instead of bi-monthly.
xii. FSA, Electricity Duty and Municipal Tax are unwarranted and should not
be levied.
xiii. Discoms expenses i.e. Administrative / Employees cost (including free
electricity) should be reduced and tariff should be reduced to Rs. 6.0/unit.
xiv. Telescopic tariff should be made applicable over the entire range of
consumption in line with Delhi.
xv. MMC in Haryana is very high i.e. 300% higher than Delhi. Hence, the
Delhi MMC schedule should be adopted in Haryana.
7. Reply filed by the Discoms in Case No HERC/RA-10 & HERC/RA-11
The Discoms have filed a detailed reply as under:-
Reply in Case no HERC/RA-10
1) Retrospective effect of tariff Order
That in compliance to the provision of the MYT Regulations, 2012, UHBVNL and
DHBVNL filed the Petitions no. PRO 62 of 2014 and PRO-63 of 2014 for APR of 2014-
15, revised ARR for FY 2015-16 and true-up of ARR for the FY 2013-14 on 1.12.2014
and 30.11.2014 respectively. The Hon’ble Commission notified the tariff Order for
UHBVN and DHBVN vide the Order dated 07.05.2015 w.e.f. 01.04.05.
That Tariff Order dated 07.05.2015 has been issued with retrospective effect
after taking the holistic view of the sector and keeping the interest of the end consumers
at priority. Any delay in recovery or shortening of the recovery period would have
caused additional burden on the consumers of the Discoms. Also, making Tariff Order
retrospective from the date of the commencement of the financial year does not amount
to inflicting legal injury to some other person because whatever is allowed in the tariff is
necessarily passed through. Again, it cannot cause legal injury if claim of the Appellant
is legally justifiable. The decisions referred to by learned Counsel for the Appellant are
out of context.
9 | P a g e
That this Hon’ble Tribunal in its judgements has already settled the issue of
retrospective operation of a tariff Order. It is submitted that the issue of Retrospectivity
is covered by judgement dated 31.05.2013 passed by this Hon’ble Tribunal in Appeal
No. 179 of 2012, Kerala High Tension and Extra High Tension Industrial Electricity
Consumer’s Association v. KSERC & Anr. This Hon’ble Tribunal held as under in the
above mentioned judgement:
“74. Let us now refer to findings of the full bench of the Tribunal dated
26.5.2006 in Appeal no.4 of 2005 & batch in case of Siel Ltd. which has
upheld the retrospective determination tariff by the State Commission and
which has been referred to by the learned counsel for the Respondent Board.
The relevant findings are as under:
“77. Some of the Industrial Consumers have questioned determination
of tariff by the Commission on the ground that the effect of the Tariff Order
for the year 2005-06 was given from April 1, 2005 while the Order was
passed on June 14, 2005. According to them the Commission was not
having any jurisdiction to require the consumers to pay enhanced tariff
from a retrospective date.
78. In Order to determine the reasons which led to the passing of the
tariff Order on June 14, 2005 instead of it being passed on March 31,
2005, it is necessary to refer to a few dates. The Board filed ARR and tariff
application on December 30, 2004. The application, however, was found
to be incomplete. The Commission by its communication dated January
21, 2005 asked the Board to remove the deficiencies and complete the
application. It was, however, only on Feb., 9, 2005 that the deficiencies
were removed and the application was taken on record. This led to delay
in the determination of tariff for the year 2005-06. The Commission was
able to pass the tariff Order only on June 14, 2005, though the financial
year commenced on April 1, 2005.
79. It is not in dispute that the Commission determined the tariff for the
year 2005-06. The Industrial Consumers would not have been able to
grudge the application of the tariff Order with effect from April 1, 2005, in
case the tariff Order was passed on that date or on a date close to that
date. It is only because the tariff Order was delayed by about two months
that the Industrial Consumers are finding fault with its application from
April 1, 2005.
80. It needs to be noticed that the retrospective operation covers only a
period of two months and having regard to the short time involved, the
10 | P a g e
Commission was of the view that the interest of the consumers will not be
adversely affected by the retrospective operation of the tariff Order.
81. We do not find that the Commission was wrong in its approach by
giving effect to the tariff Order from the aforesaid retrospective date as the
tariff was fixed for the tariff year 2005-06, which commenced on 1st April,
2005. If the submission of the Industrial Consumers is accepted, a
consumer could initiate some proceedings in a Court against the
Commission with a prayer for seeking an interim Order restraining the
Commission from revising the tariff on some ground or the other. This
could delay the passing of the tariff Order in case an interim Order
interdicting the determination of tariff is passed pending the proceedings.
In such a contingency, it is only after the interim Order is lifted by the
Court that the Commission would be in a position to pass the tariff Order.
Obviously, it would only be just and fair that the tariff Order relates back to
and commences on the first day of the year for which the tariff
determination is made. In Kanoria Chemicals & Industries Ltd. & Anr.Vs.
State of U.P. & Ors. (1992) 2 SCC 124, a question was raised with regard
to the competence of the Electricity Board to determine tariff with
retrospective effect. The Supreme Court was of the view that retrospective
effect to the revision of tariff was clearly envisaged in law. In this regard,
the Supreme Court held as follows:
“A retrospective effect to the revision also seems to be clearly
envisaged by the Section. One can easily conceive a weighty
reason for saying so. If the Section were interpreted as conferring a
power of revision only prospectively, a consumer affected can
easily frustrate the effect of the provision by initiating proceedings
seeking an injunction restraining the Board and State from revising
the rates, on one ground or other, and thus getting the revision
deferred indefinitely. Or, again, the revision of rates, even if
effected promptly by the Board and State, may prove infructuous
for one reason or another. Indeed, even in the present case, the
Board and State were fairly prompt in taking steps. Even in January
1984, they warned the appellant that they were proposing to revise
the rates and they did this too as early as in 1985. For reasons for
which they cannot be blamed this proved ineffective. They revised
the rates again in March 1988 and August 1991 and, till today, the
validity of their action is under challenge. In this State of affairs, it
would be a very impractical interpretation of the Section to say that
the revision of rates can only be prospective”.
11 | P a g e
82. Section 62, which provides for determination of tariff by the
Commission, does not suggest that the tariff cannot be determined with
retrospective effect. In the instant case, the whole exercise was
undertaken by the PSERC to determine tariff and the annual revenue
requirement of the PSERB for the period April, 1, 2005 to March 31, 2006,
therefore, logically tariff should be applicable from April 1, 2005.
83. According to sub-Section (6) of Section 64 of the Act of 2003, a
tariff Order unless amended or revoked continues to be in force for such
period as may be specified in the tariff Order. Thus the Commission is
vested with the power to specify the period for which the tariff Order will
remain in force. The Commission deriving its power from Section 64(6)
has specified that the Order shall come into force from April 1, 2005. No
fault can be found with such a retrospective specification of the
Commission.
84. The learned counsel for the industrial consumers relied on the
decision of the Supreme Court in Sri Vijay Lakshmi Rice Mills vs. State of
Andhra Pradesh, AIR 1976 SC 1471, wherein it was held that a
notification takes effect from the date it is issued and not from a prior date
unless otherwise provided by the statute, expressly or by appropriate
language from which its retrospective operation could be inferred. This
decision is of no avail to the industrial consumers, in view of the provisions
of Section 64 (6) of the Act of 2003, which empowers the Commission to
specify the period for which the tariff Order will remain in force. In other
words, the Commission is empowered to specify the date on which the
tariff Order will commence and the date on which it will expire.
85. The Board in consonance with the cost plus regime is entitled to
recover all costs prudently incurred for providing service to the consumers.
Besides, the Board is entitled to reasonable return. Since the cost
prudently incurred has to be recovered, therefore, in the event of the tariff
Order being delayed, it can be made effective from the date tariff year
commences or by annualisation of the tariff so that deficit, if any, is made
good in the remaining part of the year or it could be recovered after truing
up exercise by loading it in the tariff of the next year. All these options are
available with the Commission.
86. There is one more aspect which needs to be considered. In case
the Commission had lowered the tariff rates, relief to the consumers could
not be denied on the ground that the tariff Order is being operated
retrospectively.
12 | P a g e
87. For all these reasons we hold that the Commission had the
jurisdiction to pass the tariff Order with retrospective effect. Therefore, we
reject the submission of the learned counsel for the industrial consumers
that the tariff cannot be fixed from a retrospective date.”
In the above judgment the Tribunal has relied on the findings of the Hon’ble
Supreme Court in (1992)2 SCC 124 in the matter of Kanoria Chemical Industries Vs.
State of UP in which the Hon’ble Supreme Court upheld the retrospective revision of
tariff. The findings of the Tribunal in the Siel case will be applicable to this case also.
If the tariff is made applicable from the date of Order i.e. 07.05.2015, the revenue
gap in the ARR due to short recovery of the approved revenue will have to be allowed in
the ARR and tariff of the subsequent year with carrying cost which will unnecessarily
burden all the consumers with the carrying cost.
2) Accumulated Losses
That the Discoms had to address the shortfall of revenue owing to the
unaddressed revenue gaps in the tariff Orders of the preceding years (based on
allowance of each of the legitimate expenses) by way of borrowings. Hence, despite
performance improvement measures that had been stringently been taken by the
Discoms, the cascading effect of the ever-time piling up of unaddressed revenue gaps
has lead to accumulated losses of the Discoms to the present level. The reasons that
have lead to the financial distress of the Discoms are given hereunder:-
Regulatory Reasons
No tariff increase for nine years from 2001-02 to 2009-10.
Delay in approval of FSA coupled with staggering of recovery of FSA over 3-4
years.
Significant disallowance of costs by HERC in the ARR Orders. (~only 33% of
Interest & Finance charges allowed by Commission during 2011-12 to 2013-
14)
Deficit in the revenue requirement (ARR) was bridged through creation of
Regulatory Assets/acknowledgement of uncovered revenue gap rather than
13 | P a g e
tariff increase. The borrowings against this regulatory asset/gap further
increased the debt servicing cost.
Inadequate RE subsidy due to disallowance of Agricultural sales
Other Reasons
Due to poor financial health of Discoms banks stopped funding in June 2011.
Significant increase in employee cost attributable to 6th Pay Commission.
Massive receivables in books of accounts due to socio-political factor
amounting to over Rs. 4900 Crores as on 31 Mar 2012 (UHBVN & DHBVN).
Accordingly, both the Discoms (UHBVN and DHBVN) are undergoing financial
restructuring under FRP notified on 05th October 2012 by Ministry of Power, Govt. of
India. The successful implementation of the scheme is absolutely critical from the
perspective of financial turnaround of the Discoms. Further, it is pertinent to note that
the term of FRP is co-terminus with that of MYT control period. The total financial
restructuring under FRP scheme envisaged for both Discoms on aggregated basis is
Rs 21,439 Cr, which needs to be repaid over a period of time including the control
period of present MYT Regulations. Thus, in Order to achieve the targets set in the
Financial Restructuring Plan, it is essential for every stakeholder therein to perform for
improvement in line with the FRP.
Therefore, it can be established from the facts presented above that the valuable
consumers of the Discoms are in no way burdened and only legitimate cost is passed
on to the consumers.
3) Defaulting Amount
That there has been a reduction in the amounts receivables with time owing to
stringent revenue recovery measures being taken up by the Discoms.
The category wise Defaulting Amount and No. of defaulters in respect of UHBVN
ending March, 2015 are given below. It may be seen that the total number of connected
and disconnected consumers and defaulting amount that correspond to the Domestic-
14 | P a g e
Rural, Agriculture, Irrigation and Panchayat together correspond to 73% of the total
defaulting number of consumers and total defaulting amount.
Name of Category UHBVN
Connected Dis-Connected Total
No. Amt. No. Amt. No. Amt.
Private
Domestic (Rural) 263071 56698.56 231425 57088.64 494496 113787.20
Domestic (Urban) 56563 4289.74 77322 7668.01 133885 11957.75
Total Domestic 319634 60988.30 308747 64756.65 628381 125744.95
Non Domestic 36792 5498.27 39774 6181.20 76566 11679.47
Agriculture 104685 5945.03 13043 1683.19 117728 7628.22
Industrial 2870 9050.33 6199 4391.81 9069 13442.14
Total 463981 81481.93 367763 77012.85 831744 158494.78
Government Dept
Irrigation 175 3966.42 251 108.63 426 4075.05
M.Cs (Street light) 282 1252.73 18 88.51 300 1341.24
Panchayat 195 40.72 104 52.11 299 92.83
Public health 6249 8316.02 11 10.52 6260 8326.54
Other Govt. Dept. 262 1247.26 44 84.33 306 1331.59
Total 7163 14823.15 428 344.10 7591 15167.25
G. Total 471144 96305.08 368191 77356.95 839335 173662.03
That the Discoms have been endeavouring their best to reduce the arrears and
has decided to introduce scheme for Settlement of various categories of Electricity
consumers where disputes are pending in Courts/Arbitration/DCDRF/State
Commission/National Commission etc, in the Lok Adalats being held regularly in the
entire District Head Quarters under the jurisdiction of UHBVN. Thus, the Sales Circular
No. U- 42/2014 dated 20.11.2014 was notified by the UHBVN and the scheme was
opened upto 31.12.2014.
Moreover, it was observed that defaulting amount / arrear against various
categories of consumers was accumulating / increasing, in spite of repeated
instructions/persuasions. The major portion of defaulting amount / arrears is outstanding
against Rural Domestic Supply (RDS) consumers. Therefore, to recover the arrears, a
simple one time settlement scheme has been approved by Government of Haryana.
Accordingly, Sales Circular no.U-32/2013 dated 23.07.2013, U-44/2013 dated
18.9.2013, U-46/2013 dated 25.09.2013, U-50/2013 dated 11.10.2013 and 63/2013
dated 23.12.2013 were issued from time to time vide which one time settlement of
defaulting amount along with assured power supply to RDS (Rural domestic supply)
consumers was launched. Similarly, in compliance to the decision of the Government of
15 | P a g e
Haryana dated 02.01.2014, the matter was re-considered and the salient features /
guidelines for implementation of the scheme were notified vide the Sales Circular No.U-
05 /2014 dated 10.1.2014. Recently, the Discoms has also introduced “Mhara Gaon Jag
Mag Gaon Scheme” w.e.f. 01.07.2015 to accelerate the recovery of arrears, reduce the
commercial losses and improve the quality of supply.
DHBVN has also decided to introduce a scheme for Settlement of various
categories of Electricity consumers where disputes are pending in Courts/ Arbitration/
DCDRF/ State Commission/National Commission etc, in the Lok Adalats being held
regularly in the entire District Head Quarters under the jurisdiction of DHBVN. Thus, the
Sales Circular D-45/2014 dated 24/11/2014 was notified by the DHBVN and The
scheme was opened upto 31.12.2014.
Moreover, the DHBVN had notified the Sales Circular No D-2/2014 dated
10/01/2014 regarding Implementation of Pillar Box Scheme. In compliance to the
decision of the Government of Haryana dated 02.01.2014, it was decided that “Pillar
Box Scheme” of distribution utilities is on voluntary basis and those villages which are
willing to adopt “Pillar Box Scheme” will only be covered under the scheme. There
would not be any forcible adoption of the scheme. This system should be implemented
in those villages and areas only where residents voluntarily come forward requesting
the Discoms to erect the new safe and reliable system. The areas opting for the “Pillar
Box Scheme” of power distribution will be given power supply for 24 hours a day.
Further, the consumers having the “Pillar Box System” will be given a rebate of 20% in
bills. As the capacity of the system will be augmented and whole system would be
renovated, there would neither be breakdowns nor trippings. Also, the problem of low
voltage would be resolved.
Moreover, it was observed that defaulting amount / arrear against various
categories of consumers was accumulating / increasing, inspite of repeated
instructions/persuasions. The major portion of defaulting amount / arrears is outstanding
against Rural Domestic Supply (RDS) consumers. Therefore, to recover the arrears, a
simple one time settlement scheme has been approved by Government of Haryana.
16 | P a g e
Accordingly, Sales Circular D-38/2013 dated 17/07/2013 , Sales Instructions
Number 14/2013 date 11/09/2013, Sales Circular Number D-50/2013 dated 26/09/2013
and D-54/2013 dated 10/10/2013 were issued from time to time vide which one time
settlement of defaulting amount alongwith assured power supply to RDS (Rural
domestic supply) consumers was launched.
Similarly, in compliance to the decision of the Government of Haryana dated
02.01.2014, the matter was re-considered and the salient features / guidelines for
implementation of the scheme were notified vide the Sales Circular No.D-2/2014 dated
10/01/2014.
That theft detection has been made proactive. Implementation of mandatory
lodging of online FIRs has improved quantum of detection and disposal of cases.
It is appraised that DHBVN has constituted theft detection teams to reduce
commercial leakages through theft/pilferage. The summary of circle wise theft detection
program conducted jointly by OP Organization and vigilance Organization, for the
FY 2014-15 (ending June-15) has been presented as below:-
Name of circle
2015-2016 (upto June-15)
Conn. Checked
Theft Detected
Penalty imposed
Penalty recovered
FIR Lodged
FIR Regd.
Faridabad 1428 865 302.43 102.03 482 153
Palwal 1620 767 211.69 87.68 442 322
Gurgaon 717 369 294.5 122.27 183 69
Narnaul 188 156 53.98 33.57 29 0
Rewari 5075 261 161.56 64.85 59 0
Bhiwani 7013 963 152.92 116.8 412 92
Hisar 5215 1276 326.71 149.71 810 0
Sirsa 1354 357 98.73 49.14 267 20
Jind 1051 453 157.91 93.42 209 181
DHBVN 23661 5467 1760.43 819.47 2893 837
That the outstanding arrears from connected/disconnected consumers are also being
recovered by launching arrear recovery drives/schemes and by assigning arrear
recovery targets to the sub-divisions. The progress of disconnection effected & recovery
of defaulting amount for FY 2014-15 (ending of June- 2015) has been presented as
below:-
Month Connection Disconnected Amount recovered
No. Amt. No. Amt.
DHBVN As Whole (FY 2014-2015)
17 | P a g e
Apr-14 11571 3048.50 48467 3916.36
May-14 12713 3163.98 60303 4687.35
Jun-14 11408 2765.17 52184 4088.64
Jul-14 10090 2224.53 55204 5073.58
Aug-14 8774 1625.10 56420 4566.49
Sep-14 10720 2351.75 59665 5387.15
Oct-14 10585 1822.31 53781 5065.82
Nov-14 13812 3303.60 80231 7320.57
Dec-14 13987 3790.27 87120 7353.03
Jan-15 12443 3690.15 71274 5434.60
Feb-15 12668 3951.33 70051 5099.64
Mar-15 13337 2927.32 69608 5197.71
Total 142108 34664.01 764308 63190.94
DHBVN As Whole 2015-16
Apr-15 8074 1769.55 51882 4195.08
May-15 8777 1484.70 54148 3833.87
Jun-15 7391 1501.29 60016 5602.89
Total 24242 4756 166046 13631.84
Through the above submissions, it is submitted that DHBVN has been making all
possible efforts to overcome the loss levels. Moreover,
• RIB (Remittance in Banks) targets for field offices are being based on
normative AT&C losses.
• Centralized Software for exception report generation and monitoring for under
billing, theft of electricity has been implemented.
Monthly Minimum Charges
Monthly Minimum Charges are applicable on all domestic consumers and for
NDS consumer with load upto 20 kW. The billing data of these categories were
analyzed for the months of Jan. to Nov., 2014 wherein it has been observed that the
percentage of DS and NDS consumers being billed on MMC is 16% & 24%
respectively. The details in this regard is depicted in the table given below: -
Name of Category
Total No. of Consumers
No of Consumers billed on MMC
% of Consumers billed on MMC
Avg. Monthly amount billed against MMC ( Cr.)
DS 1829836 289081 16% 10.90
NDS 181897 43892 24% 3.31
For NDS Consumers
That the MMC charges if converted in consumption terms for normative load
factor and running hours translate in to consumption of three to four days for Urban
NDS supply and five to six days for NDS rural supply as under.
18 | P a g e
Non Domestic Demand Factor
Supply Hours
Day/ Month
kWh/Month EC/Day (Rs.)
MMC FC ( Approx days of energy uses ) Urban
FC ( Approx days of energy uses ) Rural
Urban Rural
Upto 5 kW (LT) 1. Energy Charges (
Rs.5.85/kWh) 2. MMC (Rs. 200/kW upto 5 kW
and Rs. Rs. 185/kW above 5 kW upto 20 kW)
0.8 12 8 25 1200 for Urban
consumers and 800 for
Rural consumers
280.8 for Urban & 187.2 for
Rural
1000 (For 5
kW Load)
4 6
Above 5 kW and Up to 20 kW (LT)
1. 1. Energy Charges ( Rs.6.10/kWh)
2. MMC (Rs. 200/kW upto 5 kW
and Rs. Rs. 185/kW above 5 kW upto 20 kW)
0.8 12 8 25 2400 for Urban
consumers and 1600 for
Rural consumers
585.6 for Urban &
390.4 for Rural
1925 (For
10 kW Load)
3 5
For DS Consumers:
The MMC charges if converted in consumption terms for normative load factor
and running hours translate in to consumption of 3 to 4 days for Urban DS supply and 8
days for DS rural supply. The details in this regard is depicted in the table given below
Domestic Demand Factor
Supply Hours
Day/ Month
kWh/ Month
EC/Day (Rs.)
MMC FC ( Approx days of energy uses) Urban)
FC ( Approx days of energy uses) Rural)
Urban Rural
1. Energy Charges
Category 1
0-40 unit – Rs. 2.70 per Unit
41-250 unit –Rs.4.50 per Unit
251-500 unit-Rs. 5.25 Per Unit
501-800 unit -598 per Unit Category 2
For 801 & above Rs. 5.98 for all consumptions
2. MMC (Rs. 100/kW upto 2 kW
and Rs. Rs. 60/kW above 2 kW)
0.25 16 8 30
720 for Urban and
360 for Rural
122.70 for Urban and 54.35 for Rural
440 (For 6
kW Load)
4 8
Most of the consumers who are being billed on MMC basis are manipulating their
consumption to the limit of MMC. It is also observed that the lifestyle of consumers have
changed drastically and modern electrical gadgets are even being used by low income
consumers. However, their electricity consumption is not commensurate to their
connected load and they are generally limiting their consumption upto MMC limit. Since,
19 | P a g e
there is a lot of undeclared load, proper MMC is also not being levied on such
consumers.
AT&C Losses
That the Discos are endeavouring their best to reduce distribution losses in line
with the postulates of FRP. Moreover, it may be seen that for the FY 2014-15 and 2015-
16, the AT&C losses notified by the Ministry of Power, Government of India for the State
of Haryana, are higher than the stringent norms of losses notified by the Hon’ble
Commission.
Further, as per provisional figures, the AT&C losses achieved is 24.09% for
FY 2014-15 against target of 23.96% and there is only marginal under
achievement.
Payment of Rupees 40.69 crore has not been received from Govt.
Departments against the outstanding bills raised on them due to non availability
of Budget with these Departments. In case these Govt. Departments had paid the
bills, the AT & C Losses would have been 23.78%
FSA
That the FSA is a part of tariff and, in reality, a surcharge levied to meet the
increased cost of generation and purchase of electricity. It is stated that under the
Electricity Act, 2003 (hereinafter referred as the “Act of 2003” for the sake of brevity)
expert bodies (like State Electricity Regulatory Commissions) have been constituted
and are entrusted with the task of determination of tariff and adjudicate the issues
regarding FSA along with the related issues.
It is pertinent to mention that,
The power generation companies pass on the increase of cost of power
(produced due to increase in coal/fuel prices on monthly basis based on
demand and supply of coal) to the distribution companies which gets
legitimately passed on to the consumers.
20 | P a g e
SERCs of various States revises the tariffs for electricity periodically (every
year or once in every two to three years). The new tariff is set based on the
cost of production and distribution of electricity. But the prices of fuel or coal
changes throughout the year and the utilities have to manage these
uncontrollable cost variations by legitimately passing them to the consumers.
The amount of FSA is an effect of intermittent increase in the power purchase
cost.
However since the FSA amount is more, the recovery spills over a period of
three – four years. The HERC also in the past when the FSA was levied after
the end of the year after HERC approval allowed the recovery of FSA over
three – four years, though the Discoms incurred and paid the entire cost of
power purchase on a regular basis during the year itself.
It is submitted that the Discoms- Uttar Haryana Bijli Vitaran Discoms (UHBVN)
and Dakshin Haryana Bijli Vitaran Discoms (DHBVN) apply Fuel Surcharge
Adjustment as a pass-through cost to its consumers in accordance with
HERC (Terms and Conditions for Determination of Tariff for Generation,
Transmission, Wheeling and Distribution & Retail Supply under Multi Year
Tariff Framework) Regulations, 2012 on a quarterly basis. Accordingly, per
unit fuel cost pass through gets calculated based on the norms and guidelines
laid down by Haryana Electricity Regulatory Commission.
The FSA up to 10% of the approved cost of power purchase for the respective
financial year is automatically passed through to the consumers, on a
quarterly basis by the Discoms.
That Discoms, have been furnishing the calculations pertaining to FSA, to the
Commission. It is submitted that Uttar Haryana Bijli Vitran Discoms Ltd. has been
submitting the details of FSA to the Hon’ble HERC on behalf of both the distribution
licensees within the State of Haryana. The Discoms- UHBVN vide Memo No. Ch-
14/GM/RA/N/F-54/Vol-X (A) dated 23.12.2014, on behalf of the two Distribution
21 | P a g e
Licensees i.e. UHBVNL and DHBVNL (hereinafter referred to as the DISCOMS), had
filed a petition for continuation of recovery of FSA from various category of electricity
consumers in their respective licensed areas for the FY 2011-12, FY 2012-13, FY 2013-
14 and for true-up of FSA Order dated 14/06/2010, 12/08/2011 and 26/06/2012. The
details included re-calculations of FSA amounts based on audited figures and true-up
exercise towards continuation of recovery of FSA from various category of electricity
consumers in their respective licensed areas owing to unrecovered FSA amounts
including holding costs for the FY 2011-12, FY 2012-13, FY 2013-14 and for true-up of
recoveries under FSA Order dated 14/06/2010, 12/08/2011 and 26/06/2012.
That the Commission, after the overall scrutiny of the petition filed by the
petitioners, notified the Order dated 19.3.2015 in Case No. HERC/PRO-16 of 2014
wherein the Hon’ble Commission has already approved the recovery of FSA for the FY
2008-09 to FY 2013-14 based on the actual Audited sales of the Discoms. The
applicability of holding costs on the unrecovered amounts have been legitimately
allowed by the Hon’ble Commission vide Order dated 19.3.2015 over the unrecovered
amounts of FSA so that the Discoms remain revenue neutral. The aforesaid Order has
been notified by the Hon’ble Commission post prudence check of the bills raised by the
power generators on the Discoms and thus legitimate approvals have been provided by
the Hon’ble Commission to the levy of FSA.
Moreover, the Commission has already directed the Discoms vide HERC Memo
No 2346-2347/HERC Dated 12.9.2014 that the distribution companies can recover FSA
for the previous quarter including arrears of FSA for the previous year’s subject to a cap
of 10% of the average power purchase cost for the relevant year and that the same
does not call for any specific approval from the Commission.
It is further submitted that according to section 62(4) of the Act of 2003, the tariff
may not ordinarily be amended more frequently than once in a financial year, except
any changes expressly permitted in terms of the fuel surcharge formula specified by the
Appropriate Commission. Variation in price of fuel of a generator supplying power to a
distribution licensee will affect the Power Purchase Cost of the distribution licensees.
22 | P a g e
Thus the change in Power Purchase Cost due to variation in fuel cost could be
permitted by amending tariff in terms of the fuel surcharge formula specified by the
State Commission more frequently than once in a financial year.
Hence, the recovery of FSA has always been legitimately done in accordance
with the HERC MYT Regulations 2012 and with due concurrence from the HERC. Thus,
all allegations made by the Petitioner are denied in totality.
Agriculture Subsidy
That the agriculture subsidy is calculated on the basis of the cost of supply to
agriculture consumer, tariff applicable and quantum of agriculture sales. It is also
pertinent of mention that the Power Purchase mix of the States of Punjab and Haryana
is totally different from each other. Moreover, the average Cost of supply for Agriculture
consumers in Haryana as notified vide the Tariff Order dated 07.05.2015 is Rs
7.34/kWh against the average cost of supply for agriculture consumers in Punjab is
4.58/kWh. Therefore, a direct comparison between total quanta of subsidy factoring in
only the quantum of agriculture sales won’t be accurate.
HVDS system in AP
That any capital expenditure done by the Discoms is duly approved by the
Commission. Also, a study on the benefits of HVDS was got conducted in 2012 and the
corresponding results were demarcated as tangible and intangible benefits. A sample of
50 feeders was selected so as to have a good representation of each division and that
the feeders cover different geographical areas. The tangible benefits included reduction
in energy input requirement, reduction in energy billed, increase in the number of
consumers and connected load, reduction in T&D losses, and reduction in the
transformer failure.
Reduction in energy input requirement: Analysis of Energy Input for
selected feeders reveals that post– HVDS implementation, there is an overall
reduction in the Energy Input (30%). Further, overall energy input per
consumer has been reduced by 15%.
23 | P a g e
Reduction in energy Billed: The overall energy billed during post– HVDS
period implementation period has reduced by 25%. While overall energy input
per consumer has reduced by 15% the energy billed per consumer has
reduced by 9%.
Increase in the number of consumers: The number of consumers has
increased which can be taken as reduction in the theft by direct “hooking”.
The increase in number of consumers was around 12 consumers per feeder.
Increase in connected load: The increase in consumers and load extension
by the existing consumer has resulted in the increase in the connected load
apart from few exceptions which could have been due to feeder
reconfiguration.
Reduction in T&D losses: 83% feeders contributed in the overall 6% T&D
loss improvement. This was mainly on account of the reduction in technical
losses due to high voltage distribution and plugging of unauthorized use of
electricity.
Reduction in Transformer Damage Rate: From the data available on
sample feeder, it can be seen that the overall transformer damage rate has
reduced to 3.58% post HVDS.
That as per the audited account of UHBVN the Distribution losses for the FY
2011-12 were to the tune of 31.20 %. The distribution losses for UHBVN in the FY
2010-11 were 24%. The sudden increase in the losses in mainly on account of the
revision in methodology of estimation of sales to Agriculture category in the FY 2011-12
i.e. the methodology based on the AP feeder input units. Further the Discoms increased
the supply hours in rural areas from 11 hours to 14 hours which by itself leads to an
increase of about 2.8% in the overall average losses because of over 60% losses in
rural areas.
Dubious purchase of transformer in High Voltage Distribution System: -
That under HVDS system, there was no provision of installation of Small
transformers to be mounted on poles under the objective of supply to consumers in
24 | P a g e
case of SC, BC & BPL free connection scheme. Such a provision was a part of the
RGGVY scheme, and thus the installation of Small transformers mounted on poles
under RGGVY scheme had been done and post that the scheme was discontinued
owing to high pilferage losses and misappropriation.
AT&C losses
That the claim of petitioner are unjustifiable and the Discoms have been
endeavoring its best to reduce the technical and commercial loss levels in concurrence
with the Hon’ble Commission. The Discoms has constituted theft detection teams to
reduce commercial leakages through theft/pilferage. The outstanding arrears from
connected/disconnected consumers are also being recovered by launching arrear
recovery drives/schemes and by assigning arrear recovery targets to the sub-divisions. .
Various initiatives have been taken by the Discoms like Mhara Gaon Jag Mag Gaon
Scheme and others in Order to reduce the technical and commercial losses and to
improve the operational efficiency, has been mentioned herewith: -
The salient feature of Mhara Gaon Jag Mag Gaon Scheme
1. The Scheme shall be applicable to the consumers of the villages covered
under the Mhara Gaon Jag Mag Gaon Scheme on selected RDS feeder in
each constituency.
2. The supply hours of the consumers of selected feeders has been
increased from 12 to 15 hours w.e.f 01.07.2015.
3. The principal amount of the old arrears will be recovered from the
consumers of the village in five regular instalments along with current bills,
after paying the last bill and instalment, entire surcharge amount will be
waived off on the selected feeder.
4. Reconnection at defaulter premises shall be allowed after payment of first
instalment without surcharge of outstanding bill. Balance amount will be
paid in next four instalments along with current bills.
25 | P a g e
5. When the naked LT conductor of the village is fully changed into AB
cables as per site requirement and the meters of all the households have
been brought out, the power supply to the village will be increased from 15
hours to 18 hours.
6. For measuring the power supplied to the village the meters shall be
installed on all the points from which 11 KV lines goes into the village.
After allowing for the specified quantum of technical losses below 20%, if
the village pays bills to the extent of 90% of power supplied, their
electricity supply will be increased from 18 to 21 hours.
7. After the defaulting amount of the feeder remains less than 10%,
24 Hours supply will be provided.
8. Making villages aware of the problems and hearing their grievances.
9. In case a village does not fulfil the obligations cast upon them in terms of
helping installation of AB cables, replacement of meters and bringing them
outside the houses, eventually leading to reduction of losses, the
increased supply of power will be reversed back to the original level.
The activities which are carried out in the village to improve the quality of service
to the consumers with effect from the date of convening Panchayat:
1. Replacement of bare conductor with AB cable.
2. Replacement of defective/electro mechanical meters.
3. Shifting of meters outside the premises.
4. While replacement/relocation of meter as a onetime measure, the meter
would be replaced on the spot without further checking from the M&T Lab
5. Maintenance of DT’s.
6. Maintenance of LD system.
7. Bill dispute settlement on spot.
8. Release of new connection on spot.
9. Extension of load regularization on spot.
26 | P a g e
Decreasing Prices of Imported Coal and Crude Oil
That the power generation companies pass on the increase of cost of power
(produced due to increase in coal/fuel prices on monthly basis based on demand and
supply of coal) to the distribution companies which gets legitimately passed on to the
consumers.
SERCs of various States revises the tariffs for electricity periodically (every year
or once in every two to three years). The new tariff is set based on the cost of
production and distribution of electricity. But the prices of fuel or coal changes
throughout the year and the utilities have to manage these uncontrollable cost variations
by legitimately passing them to the consumers
The amount of FSA calculated is because of intermittent increase in the power
purchase cost. Further, based on the postulates of the HERC MYT regulations 2012,
any variations in the power purchase costs are to be passed on the consumers via Fuel
Surcharge Adjustment. Significant directions over the recovery of FSA charges from
the consumers vide HERC MYT Regulations 2012 are specified below: -
Recovery of FSA amount on Quarterly basis so as to ensure that FSA
accrued in a quarter is recovered in the following quarter without going
through the regulatory process.
The FSA up to 10% of the approved cost of power purchase for the
respective financial year is automatically passed through to the
consumers, on a quarterly basis by the Discoms.
FSA calculations only in respect of approved power purchase volume
including short term power purchase cost from all approved sources at
approved losses.
In case of negative FSA, the credit shall be given to the consumers by
setting off the minus figure against the positive figure of FSA being
charged from the consumers. In other words, credit of FSA shall be given
only against FSA being charged so that the base tariff determined by the
Commission remains unchanged.
27 | P a g e
Thus, on one side as the tariff to be charged from the consumers are fixed by the
Hon’ble Commission, any variation in the power purchase cost regarding
increase/decrease in fuel prices is taken care by the applicability of Fuel Surcharge
Adjustment based on power purchase for every quarter by the Discoms. Moreover, true
up of such FSA charges including their applicability and recovery thereof are also
submitted periodically to the Hon’ble Commission for prudence check and necessary
approval.
Moreover, the share of power generated from liquid/Gas based power plants is
very less as compared to the coal based power generation. Also, the effect of decrease
in international price of fuel on the average cost of generation is negligible.
Restructured Accelerated Power development and Reforms Programme
That the R-APDRP programme is for urban areas- towns and a city with
population of more than 30,000 (10,000 in case of special category states).The focus of
R-APDRP is on actual, demonstrable performance in terms of sustained loss reduction.
It is also submitted that the Hon’ble Commission vide its Order dated 29.05.2014 has
approved Rs 427 Crores for R-APDRP (Part-B). Moreover, the status report of the
same has been submitted to the Hon’ble Commission vide memo no. CH-3/XEN/DD-
I/273/Loose file dated 30.07.2015. Hence the objection raised is unacceptable.
Suggestion of the members of State Advisory Committee (SAC) members
That the Discoms have been endeavouring its best to bring down the line losses
and to liquidate the receivables. The details of the same have been discussed in details
above and same is not reiterated for the sake of brevity. It is also submitted that the
capital expenditure is incurred by the Discoms to strengthen power distribution system
in the state, so as to ensure more power with greater reliability to meet the increasing
demand. The power transmission and distribution systems have been planned to match
the increase in demand of the state in the near future. The Discoms have judiciously
planned the capital expenditure over the next three to four years, for which integrated
planning has already been initiated. The power transmission and distribution system are
also being strengthened accordingly. The utilities have plans to construct new sub-
28 | P a g e
stations of various levels and augment capacity of existing sub-stations in the next three
years, so as to match the capacity of the transmission system in accordance with the
increasing availability and demand of power in the state.
It is hereby submitted that Ministry of Power notified revised AT&C loss trajectory
for FY 2014-15 and FY 2015-16 vide the letter dated 11th August 2014. The Discoms in
the APR fillings for FY 2014-15 and ARR filings for FY 2015-16 has Projected the
Transmission and Distribution Loss for the FY 2014-15 and 2015-16 considering Jind
circle in DHBVN as 28.58% and 24.79% respectively based on the AT&C losses of
31.29% and 27.88% for the FY 2014-15 and FY 2015-16 considering Jind Circle in
UHBVN.
It is also submitted that the Discoms has already provided details of the source
wise power purchase quantum and actual rates per unit to the Hon’ble Commission as a
part of the APR filings. There has been no power procurement done from any un-
approved sources of power. It is pertinent to mention that during peak hour season, the
Haryana Power Purchase Cell has to purchase power at extra high rate to meet the
requirement of tube well consumers.
The power generation companies pass on the increase of cost of power
(produced due to increase in coal/fuel prices on monthly basis based on demand and
supply of coal) to the distribution companies which gets legitimately passed on to the
consumers.
Moreover, the power purchased is purely on the basis of the Merit Order dispatch
based upon the tariff decided by the Hon’ble Commission. Therefore, the Hon’ble
Commission is requested to take the judicious call upon the same.
Also, the Energy demand varies during the day, between the day and night, and
across the months during different seasons. The petitioners submit that the power
procurement projections made by the utilities is based on the peak load requirement
and all the future power purchase agreements have been made based on the projected
demand within the state periphery.
Observation of the Commission is questionable
29 | P a g e
That the Discoms have been submitting the Distribution loss data as part of the
audited account of the Discoms to the Commission and also the initiative or endeavour
made by the Discoms to reduce the losses. The same has been discussed in details
and has not been reiterated for the sake of brevity.
Non Compliance of directives of Commission
It is hereby submitted that the Discoms have been making full efforts to
implement the directives given by the Commission and the compliance report for the
same has been submitted in the petition for Truing-up of the ARR for the FY 2013-14
Annual (Mid-year) Performance Review for the FY 2014-15 and Aggregate Revenue
Requirements / Tariffs of UHBVNL and DHBVNL for their Distribution and Retail Supply
Business under MYT framework for the FY 2015-16 (now withdrawn) in accordance with
the provisions of Haryana Electricity Regulatory Commission (Terms and Conditions for
Determination of Tariff for Generation Transmission, Wheeling and Distribution & Retail
Supply under Multi Year Tariff Framework) Regulations, 2012.
a) Defective Meters
That UHBVN has issued the Sales Circular No. U-15/2014 in this
regards and directed to all SEs/OP to ensure the compliance of the
directions. Above letter has been sent to Hon’ble Commission vide memo
No. Ch-11/GM/RA/N/F-173 dated 22.06.2015.
b) Pending Applications
That in Order to reduce the number of pending application and in
compliance to the Hon’ble HERC Order on ARR dated 29.05.2014, the
matter regarding release of connection has been considered and decided
to introduce the Tatkal Scheme in the first phase, vide Sales Circular No.
U- 37/2014 dated 03.09.2014. Moreover, it has been decided and directed
to all SE/OP vide the Sales Circular No. U-16/2015 that all the tubewell
connection to all the applicants to whom demand notice have been issued
till 31.12.2012 i.e. 4650 Nos. shall be released. Also, tube-well
connections to all the farmers who deposited the amount under self
financing scheme till 03.06.2015 shall also be released after taking an
30 | P a g e
undertaking. In addition, it has been decided and directed to SE/OP vide
the Sales Circular No. U-29/2015 that temporary connection shall be given
to residents of unauthorized Colonies subject to the mentioned Conditions.
Further, in compliance to the Hon’ble HERC Order on ARR dated
07.05.2015, the Discoms has directed all SEs/OP to release all pending
connections /extension of load within three months from the date of tariff
Order i.e. 07.05.2015.
Above letter has been sent to HERC vide memo No. Ch-
05/GM/RA/N/F-173 dated 10.06.2015.
c) Pending Receivables
The matter has been discussed above in detail. Therefore, for the
sake of brevity the same has not been reiterated again.
Feeder with High Losses
That the Commission vide its Order dated 07.05.2015 has directed the licensees
to bring down the number of rural feeders with above 50% losses by 50% at the end of
the FY 2015-16 and no urban feeder with above 25% line losses shall exist by the next
ARR/APR filing.
It is hereby submitted that the various initiatives taken by the Discoms to reduce
the losses have been discussed in detail in previous section and the same has not been
repeated for the sake of brevity. However, the Discoms have also directed all SEs (OP)
to take necessary action on feeder to reduce the losses as per the direction given by the
Hon’ble Commission. A Copy of same has been submitted with the Hon’ble
Commission vide the Memo No: - Ch-12/GM/RA/N/F-173 dated 25.06.2015.
AT&C losses
That the various initiatives taken by the Discoms to reduce the losses have been
discussed in detail in previous section and the same has not been reiterated for the
sake of brevity.
True-Up of ARR of FY 2013-14(Variation in controllable Items)
31 | P a g e
That the Hon’ble Commission has trued-up the ARR of FY 2013-14 based upon
the Audited account of the FY 2013-14 and in accordance with the provisions of
Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of
Tariff for Generation Transmission, Wheeling and Distribution & Retail Supply under
Multi Year Tariff Framework) Regulations, 2012. However, the Discoms have filed the
review petition (now withdrawn) against the Tariff Order notified by the Hon’ble
Commission on 07.05.2015.
Directions to HPGCL
That the matter is corresponding to HPGCL and hence the Discoms do not have
any comments to offer on the same. On this issue HPGCL vide Memo No.
909/HPGCL/Reg-200 dated 8.09.2015 and letter dated 14.10.2015 submitted that there
is a reduction in the landed cost of imported coal and oil in the range of about 10% to
12% in the FY 2014-15 and the FY 2015-16, however, its impact on the Fuel Price
Adjustment (FPA) of HPGCL is not being visualized due to meager quantity of imported
coal being utilized at HPGCL’s power plants, constant decline in the GCV of domestic
coal, comparatively costly coal linkage assigned to HPGCL, increase in the landed cost
of domestic coal etc. Additionally, it has been submitted that the share of HPGCL power
in the power purchase cost of the Haryana Discoms in the FY 2014-15 was only about
28% of their total power purchase. As such the magnitude of the FPA of HPGCL in the
FSA of the Discoms is very less. Hence, increase in FSA of the Discoms is not directly
attributed to HPGCL alone. It was further submitted that HPGCL has achieved
tremendous improvement in performance with regard to Station Heat Rate, Auxiliary
Energy Consumption and Specific Oil Consumption.
Power Purchase Cost and Allowed Distribution Loss
That Discoms has already provided details of the source wise power purchase
quantum and actual rates per unit to the Hon’ble Commission as a part of the APR
filings. There has been no power procurement done from any un-approved sources of
power. It is pertinent to mention that during peak hour season, the Haryana Power
Purchase Centre has to purchase power at extra high rate to meet the requirement of
tube-well consumers. Also, Discoms in Order to minimize the average per unit power
32 | P a g e
purchase cost strictly follow Merit Order dispatch. However, Ministry of Power notified
revised AT&C loss trajectory for the FY 2014-15 and FY 2015-16 vide the letter dated
11th August 2014. The Discoms in the APR fillings for the FY 2014-15 and ARR filings
for the FY 2015-16 has Projected the Transmission and Distribution Loss for the FY
2014-15 and 2015-16 considering Jind circle in DHBVN as 28.58% and 24.79%
respectively based on the AT&C losses of 31.29% and 27.88% for the FY 2014-15 and
FY 2015-16 considering Jind Circle in UHBVN.
Implementation of “Patiala Model” to bring down the losses of Discoms
That the Haryana Power Sector comprises four wholly State-owned Corporations
viz HPGCL, HVPNL, UHBVNL and DHBVNL which after unbundling of the HSEB in
1998 are responsible for power generation, transmission, distribution and trading in the
State. These utilities and the HERC work under the administrative control of the
Department of Power.
The State power sector was restructured on August 14, 1998. The Haryana State
Electricity Board (HSEB) was reorganized initially into two State-owned Corporations
namely Haryana Vidyut Prasaran Discoms Ltd. (HVPN) responsible for operation and
maintenance of State’s owned Power Generating Stations. HVPNL was entrusted the
power transmission and distribution functions. Simultaneously, an independent
regulatory body i.e. Haryana Electricity Regulatory Commission (HERC), was
constituted to aid and advise the State Govt. on the development of the power sector, to
regulate the power utilities and take appropriate measures to balance the interest of
various stake-holders in the power sector, namely electricity consumers, power entities
and generation companies etc.
Uttar Haryana Bijli Vitran Discoms Limited (UHBVNL), a Government of Haryana
Undertaking undertakes the Power Distribution and Retail Supply Business in the
Northern Parts of Haryana. UHBVNL is registered under the Companies Act-1956 and
has commenced its operations in July, 1999. Thus the power distribution companies are
autonomous in terms of operational efficiencies and performances, however, the
operations are dependent on each other in the entire power sector value chain
33 | P a g e
Moreover, the Discoms has been time and again notifying incentive and penalty
schemes in Order to ensure optimal performance by the Discoms officials.
An example to the same is the Sales Circular No.U-33/2013 dated 24.07.2013
notified by the Uttar Discoms in the matter of recovery of outstanding arrears from
Permanent Disconnected Consumers vide which it was decided to launch/introduce an
incentive scheme for the purpose so that the recovery of arrears from permanent
disconnected consumers is undertaken.
Tariff Slabs
That the Commission notified the tariff Order for the FY 2015-16 on 07.05.2015.
As per the notified tariff Order, the cost of supply for domestic consumers is
Rs 7.16/kWh and the cumulative shortfall at the tariff notified vide the Order dated
07.05.2015 is estimated to be Rs 2229.4 Crores. Therefore, in Order to garner Rs 1146
Crores out of the total gap, the Hon’ble Commission has increased the DS tariff as well
as changed the DS tariff slab structure in compliance of the National Tariff Policy. As
has been notified in the aforesaid Order, the Hon’ble Commission has increased the DS
slab 0-40 Units per month to 0-50 Units per month and has left the tariff unchanged at
Rs. 2.70/kWh in Order to protect the interest of the small and marginal DS consumers.
Tariff Order of Punjab
That State of Punjab and Haryana have different Consumer mix, Power
Purchase cost and consumption pattern. Therefore, it won’t be accurate to compare the
tariff increase allowed for the two States. Moreover, the Discoms of Haryana are under
huge financial distress. The following reasons that have led to the financial distress of
the Discoms are given hereunder:-
Regulatory Reasons
No tariff increase for nine years from 2001-02 to 2009-10.
Delay in approval of FSA coupled with staggering of recovery of FSA over 3-4
years.
34 | P a g e
Significant disallowance of costs by HERC in the ARR Orders. (~only 33% of
Interest & Finance charges allowed by Commission during 2011-12 to 2013-
14)
Deficit in the revenue requirement (ARR) was bridged through creation of
Regulatory Assets/acknowledgement of uncovered revenue gap rather than
tariff increase. The borrowings against this regulatory asset/gap further
increased the debt servicing cost.
Inadequate RE subsidy due to disallowance of Agricultural sales
Other Reasons
Due to poor financial health of Discoms banks stopped funding in June 2011
Significant increase in employee cost attributable to 6th Pay Commission.
Massive receivables in books of accounts due to socio-political factor
amounting to over Rs. 4900 Crs as on 31 Mar 2012 (UHBVN & DHBVN).
Accordingly, both Discoms (UHBVN and DHBVN) are undergoing financial
restructuring under FRP notified on 05th October 2012 by Ministry of Power,
Government of India.
Therefore, in compliance to the provision of the MYT Regulations, 2012 and with
the power conferred under the Section 62 of the Act, the Hon’ble Commission in the
Tariff Order dated 07.05.2015 has increased the tariff on account of increase in Power
Purchase Cost, O&M cost, IFC and other costs in Order to garner the revenue gap.
8.0 Reply filed by DHBVNL in Case no HERC/RA-11
DHBVNL vide their memo no. Ch-5/SE/RA-532 dated 05.10.2015 filed their
detailed reply to the issues raised by DMRC in its review petition. The relevant reply, in
brief, is presented below:-
That the review petition filed by DMRC is time barred and hence the same is
liable to be rejected.
On the issue of treating DMRC at par with the Railways and highest increase in
tariff, DHBVNL has replied that tariff determination / classification is in the purview of the
35 | P a g e
Commission. Hence, the tariff determined by the Commission vide its Order dated
07.05.2015 for electricity supply to DMRC is being levied by DHBVNL.
On the issue of actual / maximum demand, DHBVNL has replied that the penalty
is being imposed on the over drawl of power to manage load on the distribution /
transmission system. During such over drawls there is a load strain on the transmission
/ distribution system and the Discoms have to manage the load of the system which
results in extra cost to the Discoms. Further, it has been submitted that such over
drawls by the consumer result in increased wear and tear to the system translating into
higher non-routine/un-planned R&M expenses incurred by the Discoms. Additionally, it
has been submitted that in the event of overdrawl the Discoms have to bear additional
expenses over any deviation from the schedule of power drawls that are levied by the
grid operators in Order to maintain system stability. Hence, the penalty imposed on
such significant over drawls by DMRC is justified.
9.0 Public Hearing
In Order to afford an opportunity to the parties, including general
public/stakeholders, the Commission held a public hearing in the matter on 07.10.2015
as per schedule of hearing notified in the Newspapers as well as posted on the
Commission’s website under the heading “Schedule of Hearings”. All parties were
present. The Commission heard the petitioners i.e. Shri Sampat Singh and DMRC at
length. The Commission also afforded an opportunity to the consumers / associations
who were present in the hearing to make oral submissions.
At the outset the Commission would like to make it clear that the public
proceedings before the Commission in general and in the matter of determination of
electricity tariff including its review has universal ramification on the electricity
consumers of the entire State. Hence, given its importance as well as need to ensure
transparency in the proceedings as well as to address the concerns of the large number
of electricity consumers present in such proceedings, it is highly desirable that the
Managing Directors of the Discoms are present in the public hearings in such matters.
The schedule of public hearings are notified by the Commission well in advance, hence
attending the public hearing should take precedence over any other meetings that may
36 | P a g e
require presence of the Managing Directors. The Commission has taken a very serious
note of the fact that the Managing Director of DHBVNL preferred not to be present in the
public hearing and also did not inform the Commission regarding this.
The Commission has carefully taken note of the grievances including
inefficiencies of the Discoms raised by various electricity consumers and would like to
assure them that this Commission is very closely monitoring the operating performance
as well as various expenditures of the Discoms and is taking actions accordingly. A
case in point is because of the certain inefficiencies and failure of the Discoms to
achieve the benchmarks, the Commission has not allowed any Return on Equity (ROE)
to the Discoms. Further, interest on working capital loan was allowed to the Discoms on
normative basis. Hence, interest cost on excessive working capital borrowings were
disallowed by the Commission. Additionally, in Order to rein in expenses of the Discoms
the Commission in its Order dated 7.05.2015 has directed them to review the expensive
power purchase agreements, timely recover the outstanding receivables including those
from the Government Departments, time bound replacements of the defective meters,
time bound release of pending connections/load, intimation / bill through email and
SMS, timely payment of interest on ACD, e-tendering, inventory management etc.
Additionally, the Commission, in Order to allay the apprehensions of the Consumers
regarding high employees cost would like to intimate that the Commission in the year
2013 and on 17.01.2014 approved certain need based recruitments by the power
utilities, hence, any cost of additional recruitment towards non – technical / technical
posts beyond 17.01.2014 shall not be allowed to be passed on to the consumers
through electricity tariff unless the same is done with prior approval of the Commission.
In addition to the above, the Commission observes that almost all the interveners
are aggrieved by the FSA (including for the current as well as past few years) being
levied by the Discoms. The Commission has taken note of the financial hardship being
faced by the consumers. However, as the issue is neither germane to the present
proceedings nor the same, as per the law / statutes / regulations in vogue, falls in the
scope of a review petition, the Commission, after scrutinizing the details of the FSA(s)
being levied/ FSA arrears already collected shall consider separately the possibility of
providing relief, if any to the electricity consumers of the State while at the same time
37 | P a g e
keeping in mind the commercial viability of the financially distressed Discoms as the
cost of power procured by them from various power generating companies are beyond
their control. Further, the Commission observes that most of the consumers have
pointed out that the cost of fuel (coal/oil) has declined. It needs to be noted that the
present FSA that is being recovered is based on the difference in the normative cost of
power allowed by the Commission and the actual cost of power incurred by the
Discoms. Further, no additional transmission or distribution losses over and above that
approved by the Commission in its ARRs / tariff Orders are being passed on to the
electricity consumers.
Having observed as above, the Commission shall proceed to examine, on merit,
the review petitions preferred against the HERC Order dated 07.05.2015.
In the hearing held on 07.10.2015, the Petitioner argued at length in support of
his contention that the Commission has erroneously introduced the slabs in the DS
tariff. Resultantly, the cost of marginal unit consumed has become excessively high. He
also disputed the claim of the Commission as well as the un-identified spokesperson
regarding telescopic tariff as well as marginal increase in tariffs. He mostly reiterated the
illustrations regarding this as per his written submissions, hence the same, for the sake
of brevity is not being reproduced here. Further, he vehemently assailed the
unprecedented increase in MMC charges on small DS consumers.
Taking his arguments forward the Petitioner submitted that there are huge
outstanding amount from the consumers and the Discoms have failed to collect the
same and instead sought tariff hike which was allowed by the Commission. He dwelt at
length on the failure of the Discoms to reduce distribution losses including theft of power
by the unscrupulous consumers including with connivance of the Discoms staff and the
fact that such losses are being loaded on to the honest and paying consumers by way
of a tariff hike. He also suggested that the Haryana Discoms should also introduce
‘Patiala Model’. The Petitioner also submitted the hefty increase in the FSA over and
above the tariff(s) thereby making the cost of power un-affordable even for Industrial /
commercial consumers. This, in his view, may force such consumers to relocate to
some other States and discourage setting up of Industry / commercial enterprise in
38 | P a g e
Haryana thereby adversely impacting the employment / earnings in Haryana. Shri Singh
further argued that despite over a decade of power sector reforms in Haryana including
un-bundling and corporatization as well as the Financial Restructuring Programme
(FRP) the accumulated losses as well as the borrowings of the Discoms have increased
phenomenally. Additionally, he assailed the true – up of the ARR for the FY 2013-14
allowed by the Commission amounting to Rs. 1277.42 Crore and prayed that the same
may be deducted and tariffs be reduced accordingly.
In addition to the above, the Petitioner brought to the notice of the Commission
that the Orders/directives issued by this Commission are not being complied with by the
Discoms. Hence, the status of the directives issued by the Commission vis-à-vis its
compliance be made available online. Similar online availability of information was
sought regarding feeder losses, defaulting amount (including name of the defaulters) as
well as action taken against the erring officers / staff of the Discoms.
In the end he prayed that the tariff increase (including MMC) be rolled back and
running telescopic slab may be reintroduced in the DS category.
Shri Ashwani Kumar Duhan, also expressed that the Discoms were not obeying
the directives being issued by the Commission from time to time. He requested that if
they do not obey the directions, then they may be penalized as per powers vested in the
Commission under Section 142 of the Electricity Act, 2003. He also endorsed the views
of petitioner Sh. Sampat Singh. Sh. Wazir Singh Kohar also requested to take
appropriate action against the Discoms for not complying with the Orders/directives of
the Commission. He also requested that the tariff for domestic supply may be made
telescopic. Other consumers/associations, as detailed under Para 6, also requested that
the DS category tariff may be made telescopic upto 800 Units and that increase in FSA
should also be withdrawn. They also stated that the Discoms were not performing their
defined duties resulting into high line losses and inefficiency and requested the
Commission that they may be directed to either to show improvement or face action
under sections 142 and 146 of the Electricity Act, 2003.
39 | P a g e
Shri Sharat Sharma, Director (Operation) DMRC as well as the other objectors
present in the hearing mostly reiterated their written submissions already mentioned in
the present Order. Hence, for the sake of brevity the same are not being re-produced
here.
Per Contra Shri Nitin Yadav, Managing Director, UHBVNL along with Shri Varun
Pathak, Advocate, appearing for the Respondents Discoms argued as under:-
Shri Nitin Yadav, Managing Director UHBVNL argued that the issues raised by
the Petitioners as well as the other stakeholders needs to be seen in the right
perspective. He pointed out that kVAh billing has been widely accepted as a self
regulatory mechanism to control and rein in the reactive load and thereby optimize the
flow of active load. In case the reactive load is not adequately compensated by a
consumer by installing appropriate capacitor, he is putting avoidable burden on the
distribution system of the Discoms and consequential cost thereto. Hence, the resulting
low power factor will manifest in higher electricity bills. However, in case a consumer
adequately compensates for the reactive energy, in the present dispensation i.e. kVAh
based billing, his power factor will improve and his electricity bills would decrease to that
extent. Therefore, the kVAh based billing has an inbuilt incentive/penalty mechanism
and has been rightly introduced by the Commission. This, he argued, is also true for
DMRC i.e. in case (as claimed by the DMRC) that their power factor is Unity (or near to
unity) then the kVAh and kWh readings would be the same and the benefit of lower
kVAh tariff would follow. He further argued that introduction of kVAh based tariff may not
be seen as a ‘money making’ proposition but the same needs to be tested on the anvil
of integrity and reliability of the distribution system as a whole. Additionally, he
submitted that installing Capacitors does not take much time and the same can be done
by the consumers. The Discoms are also installing Capacitors of adequate capacity on
all its DTs. He prayed that the Commission, giving the advantages of kVAh based tariff,
for both the Consumers as well as the Discoms, should extend it to all such consumer
categories wherever feasible. Shri Nitin Yadav argued at length that any value added
service including billing applications require time and investments. The Discoms are
working towards rolling out a robust / standardized billing application which can be
accessed by all the consumers. The rollout has already been done in the towns covered
40 | P a g e
under RAPDRP. On the issue of excessive loans and interest burden he submitted that
any excessive loans and interest cost thereto is being disallowed by the Commission
and hence the same is not passed on to the electricity consumers. On the issue of
unjustifiable fixed charge being recovered by the Discoms, Shri Nitin Yadav argued that
the assumption of Rs. 3.90/kWh power purchase cost in the FY 2015-16 is under-stated
and the actual cost on the basis of the invoices raised by the Generators supplying
power to Haryana is more than that, hence, the difference gets reflected in the FSA. He
further pointed out that the power demand in Haryana fluctuates widely i.e. between
about 4500 MW to 7500 MW. The Discoms, in Order to meet peak demand, has to
arrange power accordingly and since such arrangements are generally on ‘take or pay
basis’ even if entire contracted power is not drawn by the Discoms the fixed charges are
payable. The same analogy is applicable to the electricity consumers of the Discoms
and hence fixed charges / MMC is being levied as determined by the Commission. He
assured the stakeholders that the power being drawn by the Discoms are strictly based
on ‘merit Order/ stacking and no avoidable cost is being passed on to them. On the
issue of implementation of Standards of Performance and non- maintenance of proper
complaint record by the field staff of the Discoms , he submitted that a centralized
number with round the clock availability has been introduced and if the complaints are
not attended to then the complaint is escalated to next higher level. On the issue of
introduction of Time of Day tariff Shri Yadav submitted that survey is being undertaken
in Panipat and the Discoms are moving cautiously in view of the not so encouraging
experience in Punjab.
In addition to the above arguments of the Managing Director, UHBVNL, the
Learned Advocate Shri Varun Pathak, appearing for the Discoms, argued as under:-
At the outset, the Ld. Advocate argued that the present review petitions are not
maintainable and are time barred. Further, the Petitioners have also not sought
condonation of delay, hence, the review petitions are liable to be rejected on this ground
itself. He further argued that the Petitioners under the garb of seeking review are in fact
seeking indulgence of this Commission to sit in judgment on its own Order dated
7th May, 2015 which is not permissible under the law. Hence, he argued, that the issues
being agitated before this Commission are beyond the scope of review jurisdiction of
41 | P a g e
this Commission as the same are in the nature of an appeal. Additionally, he argued
that in case the Discoms have charged any amount in excess of the tariff and charges
determined by the Commission then remedy is available to such consumer(s) under
Section 62(6) of the Electricity Act, 2003. Hence, such matters cannot form part of the
review jurisdiction of the State Commission. On the issue of efficiencies of the Discoms,
if any, the Ld. Advocate argued that the Discoms have been disallowed any return on
equity by the Commission.
The Ld. Advocate cited catena of case laws / judgments including that of the
Hon’ble APTEL upholding the validity of giving retrospective effect to the tariff Order(s)
issued by the State Electricity Regulatory Commissions (SERCs).
Contesting the arguments of the Petitioner Shri Sampat Singh that the FSA
mechanism is a unique phenomenon in Haryana, the Ld. Counsel cited example of
many States including Delhi, wherein the SERCs have allowed FSA to be recovered
from the electricity consumers of the respective States.
Further, the Discoms, vide affidavit dated 12th October, 2015, has submitted as
under:-
“The Commission vide the Order dated 07.05.2015 has notified the Tariff Order for
FY 2015-16. The Discoms against the impugned tariff Order filed the review petition
under section 94 of the Electricity Act 2003 and Regulation 78 (1) & (2) of Haryana
Electricity Regulatory Commission (Conduct of Business) Regulations, 2004 for review
of Haryana Electricity Regulatory Commission Tariff Order for True-up for the FY 2013-
14, Annual (mid-year) Performance Review for the FY 2014-15 and revised Aggregate
Revenue Requirement of UHBVNL & DHBVNL & distribution & retail supply tariff for the
FY 2015-16. During the Hearing on 07.10.2015 it was directed by the Hon’ble
Commission to make further submissions within a period of 7 days. Further, Pursuant to
the Public Hearing on 07.10.2015 on review of aforesaid tariff Order the Discoms
intends to make following Submissions.
a) Withdrawal of Review Petition: - The Discoms pursuant to the hearing on
07.10.2015 prays before the Hon’ble Commission to allow the petitioner to
42 | P a g e
withdraw the Review Petition filed dated 01.07.2015 against the Order dated
07.05.2015 with a liberty to file to petition afresh subsequently.
b) The Discoms further prays for the following correction / amendment in the tariff
for the domestic category pursuant to the hearing on 07.10.2015 :
Revised Tariff (w.e.f. 01.04.2015) Proposed Tariff Slabs
Category - 1 ( Consumption Up to 100 Units per
month)
Category - 1 (Consumption < 800 units)
0-50 2.70 Telescopic 0-50 2.70 Telescopic
51-100 4.50 Telescopic 51-100 4.50 Telescopic
Category - 2 ( Consumption between 101 to 500
units per month )
101-250 5.00 Telescopic
0-250 5.00 Telescopic 251-500 6.05 Telescopic
501-800 6.75 Telescopic
Category - 2 (Consumption > 800 units)
251-500 6.05 Telescopic >800 6.75 Non
Telescopic
Category - 3 ( Consumption Above 500 units per
month )
> 500 6.75 Non Telescopic
The above correction in tariff would result in a revenue reduction of about Rs.
182 cr. as per the calculations of the Discoms. The Discoms propose to meet this
shortfall through following tariff and cost reduction measures:
1. KVAh Billing of PWW, MITC, Lift Irrigation and Street light categories: -The
petitioners submits that the Hon’ble Commission notified tariff schedule of
PWW, MITC, Lift Irrigation and Street light categories vide the Tariff Order
dated 07.05.2015. The Discoms had proposed KVAh billing in place of KWh
Billing for computation of energy charges as the running load of these
categories is Inductive in nature. KVAh metering is a concept mooted to
replace the conventional kWh metering. As per the current Tariff Structure the
43 | P a g e
Tariff is fixed for the Active Energy (KWH). The Discoms has to absorb the
loss in the supply system due to the Additional amount of current drawn due
to the lower Power Factor. This results in increase in Line losses and reduced
capacity of the network to cater the Active Load. To counter this Regulatory
measures are to be initiated upon the consumers who do not maintain the
power Factor at specified value. If KVAh Metering is employed, automatically
it becomes the responsibility of the consumer to maintain the Power Factor,
else the Consumers who do not maintain the Power Factor have to
automatically pay themselves for the additional burden due to poor power
factor of the load maintained by them. As such this additional burden is totally
borne by the Consumers who maintain lower Power Factor. Some of the
Benefits of KVAh Billing are mentioned herewith:-
It will incentivize the consumers to improve the power factor by way of
installation of capacitors at the load point itself, which would be the right
practice.
With the better power factor, the line loading shall be lower for the same
KW requirement leading to lower transmission as well as distribution losses.
The Prime Objective of the KVAh based billing is to encourage the consumers to
maintain near unity Power factor to achieve loss reduction. Therefore, the
Hon’ble Commission is requested to consider the above submission in this
regard and suitably amend the tariff schedule of the PWW, MITC, Lift Irrigation
and Street light categories.
It is estimated that KVAh Billing of PWW, MITC, Lift Irrigation and Street light
categories will also provide additional revenue.
2. O&M Cost reduction :
In addition to the above it is proposed to meet the shortfall through reduction in
the O&M cost by outsourcing of the O&M activity which would result in savings
on account of the following:
44 | P a g e
a) Reduction in Equipment Failure rate such as Transformer damage etc.(Rs 67
Crore Approx)
b) Reduction in salaries due to outsourcing of O&M Activities and restructuring
of Discoms. In addition, the Discoms also propose to engage the ITI
certified/Poly technique Diploma holders as interns. (Rs 100 Crore Approx)
c) Reduction in cost on account of AMR/Spot Billing in both the Discoms.( Rs 60
Crore Approx).
The total saving in the cost on account of above intervention comes to
approximately Rs 227 Cr. Whereas, the Discoms have estimated a net impact of
Rs 182 Cr due to correction in tariff.
d) Revision in Levy of FSA in Domestic Category: - It is hereby Submitted that
Hon’ble Commission vide Order dated 19.03.2015 has determined the rate of
recovery of outstanding FSAs (up to FSA of FY 2013-2014) till such time the total
amount as determined is recovered. Pursuant to the aforesaid Order the
Discoms Issued Sales Circular no 18/2015 dated 12.06.2015 (UHBVN). The
Subsequent FSA levied after this Order The Discoms Proposes to revise the
slab wise recovery of FSA Ordered vide circular no. 18 of 2015 as per the table
below:
Category
Circular No u 18/2015 dated 12.06.2015
Proposed FSA recovery
Approved FSA recovery as per Order
dated 19.03.2015
Progressive FSA
levied as per the
MYT Order as on
01.04.2015
Total FSA New
Proposed Slabs
Proposed FSA recover
y
Progressive FSA levied as per the MYT Order as on
01.04.2015
Total FSA
Domestic Supply Paisa/KWH Paisa/kWH Paisa/KWH
Paisa/KWH
Paisa/KWH Paisa/kWH
0-40 77 37 114 0-50 77 37 114
41-250 106 37 143 51-100 106 37 143
251-500 115 37 152 101-250 106 37 143
501-800 127 37 164 251-500 106 37 143
Above 800 127 37 164 501-800 106 37 143
>800 127 37 164
The FSAs levied subsequently will be charged as being done currently.
45 | P a g e
e) It is Hereby submitted that the introduction of fixed charges for certain consumer
categories is in line with the two-part tariff principle adopted by almost all the
State Electricity Regulatory Commissions (SERCs) across the country. A certain
amount of fixed charges has to be charged from consumers as a means of
recovering the investment already made by the Discoms assuming a certain
minimum demand. Especially for industrial consumers, distribution licensees
have to undertake significant investment in the attempt to ensure an adequate
system in place to cater to the collective demand of the industrial units, if need
be. Hence, fixed charges on the basis of connected load/contract demand are
legitimately essential.
Almost all State Electricity Regulatory Commissions (SERCs) across the country
have already made the progressive move to a two-part tariff. This is because
fixed charges are essential for allowing recovery of certain costs of fixed nature
which are borne by the licensee irrespective of the quantum of energy purchased
by end consumers.
The Hon’ble Commission vides the tariff Order dated 07.05.2015 determined the
tariff for the LT industries having load more than 20 KW. The relevant excerpt of
the Order has been given herewith:
“The Commission in pursuance of Hon’ble Appellate Tribunal for Electricity
decision, in its Order dated 07.12.2011 had decided that the fixed charges
shall be levied on the connected load rather than on sanctioned contract
demand as petitioned by LT industry consumers and 80% of the
connected load shall be considered for the purpose of levying fixed
charges. This relief granted has been retained in the present Order too.
However, where the MDI meters exists the tariff shall be accordingly
charged i.e. based on the recorded demand as per the ibid Order.
Additionally Rs. 185 / kW shall be levied as MMC in case in any billing
cycle there is no recorded demand.”
It is hereby submitted that the Hon’ble Commission has not specified the
minimum demand or minimum percentage of Contract demand to be considered
46 | P a g e
for levying of fixed charge in case of recorded demand more than zero in any
billing cycle for LT Industrial consumers having load more than 20KW and MDI
meter installed. As such, the two part tariff ensures that a consumer consuming
less energy (not fully utilizing the sanctioned demand) does not get undue
advantage by paying very less electricity charges as compared to another
consumer who is making full use of the contract demand and eventually pays
more energy charges, thus in effect cross subsidizing the first consumer.
Therefore it is requested before the Hon’ble Commission to provide clarification
on levying of fixed Charges or specify a minimum percentage of contract demand
for levying of fixed charges on LT industrial Consumers having load more than
20KW and MDI meter installed for making appropriate correction and appropriate
revision in tariff.
f) Inadvertent error regarding tariff of NDS category of consumers for FY 2014-15
notified in the APR tariff Order dated 7 May 2015: - It is submitted that the Hon’ble
Commission vide MYT tariff Order dated 29 May 2014, had notified the tariff for Non
Domestic category of consumers as given below:
Category of consumers Energy Charges (Paisa/kWh
or/KVAh)
Fixed Charge
MMC (Rs. per kW per month of the
connected load or part thereof)
Non Domestic
Up to 5 kW (LT) 585/kWh Nil Rs. 200 up to 5 kW and Rs. 185 above 5
kW up to 20 kW Above 5 kW and Up to 20 kW (LT) 610/kWh Nil
Above 20 kW up to 50 kW (LT) 650/kWh 150/kW Nil
Existing consumers above 50 kW up to 70 kW (LT)
675/kWh 160/kW Nil
Consumers above 50 kW (HT)
635/kWh or 572/KVAh in case consumer opts for KVAh based
billing
160/kW Nil
However, the Hon’ble Commission vide APR tariff Order dated 7th May 2015, had
notified the tariff for Non Domestic category of consumers along with giving details
of the tariff for FY 2014-15 as given below:
Sr. No.
Tariff for 2014-15 Tariff for 2015-16
Category of consumers
Energy Charges (Paisa /
Fixed Charge (Rs. per kW per
month of the
MMC (Rs. per kW per month of
Category of consumers
Energy Charges (Paisa /
Fixed Charge (Rs. per kW
per month of
MMC (Rs. per kW per month of
47 | P a g e
kWh or/ KVAh)
connected load / per kVA of sanctioned
contract demand (in
case supply is on HT) or as
indicated
the connected load or part
thereof)
kWh or/ KVAh)
the connected load / per kVA of sanctioned
contract demand (in
case supply is on HT) or as
indicated
the connected load or part
thereof)
Non Domestic Non Domestic
Up to 5 kW
(LT) 585/kWh Nil
Rs. 200 up to 5 kW and
Rs. 185 above 5 kW up to 20 kW
Up to 5 kW (LT)
605/kWh Nil Rs. 250/kW up to 5 kW
and Rs. 225/kW
above 5 kW & up to 20
kW
Above 5 kW and Up to 20
kW (LT) 610/kWh Nil
Above 5 kW and Up to 20
kW (LT) 675/kWh Nil
Above 20 kW up to 50 kW
(LT) 600/kWh 150/kW Nil
Above 20 kW up to 50 kW
(LT) 615/KVAh 170/kW Nil
Existing consumers
above 50 kW up to 70 kW
(LT)
675/kWh 160/kW Nil
Existing consumers
above 50 kW up to 70 kW
(LT)
650/KVAh 170/kW Nil
Consumers
above 50 kW (HT)
635/kWh or 571/KVAh
in case consumer opts for KVAh based billing
160/kW Nil Consumers
above 50 kW (HT)
630/KVAh 170/kW Nil
Hence it may be seen that while the approved tariff for the NDS sub categories
whose connected load falls between the range of 20 KW to 50 KW (LT), though
the energy charges approved for FY 2014-15 vide MYT tariff Order dated
29.5.2014 were 650 paisa per KWh, the Hon’ble Commission while reiterating the
energy charges approved for FY 2014-15 vide APR tariff Order dated 7.5.2015 for
the said sub category has inadvertently mentioned as 600 paisa per KWh.
Similarly, it may be seen that while the approved tariff for the NDS sub categories
whose connected load falls above 50 KW (HT), though the energy charges
approved for FY 2014-15 vide MYT tariff Order dated 29.5.2014 were 572
paisa/KVAh in case consumer opts for KVAh based billing, the Hon’ble
Commission while reiterating the energy charges approved for FY 2014-15 vide
APR tariff Order dated 7.5.2015 for the said sub category has inadvertently
mentioned as 571 paisa/KVAh in case consumer opts for KVAh based billing.
Therefore, it is requested before the Hon’ble Commission to provide the
Clarification on the same
48 | P a g e
g) It is further submitted that about 90% of directives have already been complied and
rest of the directives shall be complied with shortly.
h) Prayer
The Petitioner prays before the Hon’ble Commission to consider the prayer of the
petitioner made as above and pass suitable Order.
10. Commission’s Analysis and Order
The Commission, while passing the present Order, has considered the petitions
filed by Shri Sampat Singh, DMRC as well as other stakeholders / consumers and the
reply filed by the Discoms as well as the oral arguments of the parties in the hearing
held on 7.10.2015. Further, the Commission, in the hearing, had allowed seven days
time to any stakeholder / consumers who may like to submit their objections /
suggestions. Hence, all such objections / comments filed by the stakeholders have been
considered by the Commission while passing the present Order.
Before further proceeding in the matter, the Commission, in larger public interest,
condones the delay in filing the present review petitions, and proceeds to examine the
case on merit.
The Commission has further examined the issue raised by the Ld. Counsel Shri
Varun Pathak appearing for the Discoms that the issues raised by the Petitioners do not
fall in the review jurisdiction of the Commission and hence the petition(s) are liable to be
rejected on this ground itself. Per Contra the Petitioners Shri Sampat Singh as well as
the Representative of DMRC argued that in the impugned Order of the Commission
there exists error apparent on the face of record and hence the same falls squarely in
the ambit of review jurisdiction of this Commission.
In Order to resolve the scope of review jurisdiction, the Commission has
examined the provision of Regulation 78(2) of the HERC (Conduct of Business)
Regulations, 2004 including its subsequent amendments, under which the Commission
can exercise review jurisdiction. The relevant regulation is reproduced below:-
78 (2) “REVIEW OF THE DECISIONS, DIRECTIONS, AND ORDERS:
49 | P a g e
The Commission may review its Orders or decisions if:-
(a) There exists an error apparent on the face of the record, or
(b) Any new and important matter of evidence was discovered which after
the exercise of due diligence, was not within the knowledge of or could
not be produced by the party concerned at the time when the Order or
decision was made, or
(c) For any other sufficient reasons”.
The Commission has also perused the judgment of Hon’ble Delhi High Court in
Aizaz Alam Versus Union of India & Others (2006 (130) DLT 63: 2006(5) AD (Delhi)
297. The relevant extract from the aforesaid judgment is reproduced below:-
“We may also gainfully extract the following passage from the decision of the
Supreme Court in Meera Bhanja V. Nirmala Kumari Choudhury, where the Court,
while dealing with the scope of review, has observed:
The review proceedings are not by way of an appeal and have to be
strictly confined to the scope and ambit of Order 47, Rule 1, CPC. The
review petition has to be entertained on the ground of error apparent on
the face of record and not on any other ground. An error apparent on the
face of record must be such an error which must strike one on mere
looking at the record and would not require any long drawn process of
reasoning on points where there may conceivable be two opinions. The
limitation of powers of courts under Order 47 Rule 1, CPC is similar to the
jurisdiction available to the High Court while seeking review of the Orders
under Article 226.
Applying the above principles to the present review petition, there is no
gainsaying that the review of the Order passed by this Court cannot be
sought on the basis of what was never urged or argued before the Court.
The review must remain confined to finding out whether there is any
apparent error on the face of the record. As observed by the Supreme
Court in Lily Thomas and Ors.V Union of India & Ors., the power of review
can be used to correct a mistake but not to substitute one view for
another. That explains the reason why Krishna Iyer, j. described a prayer
for review as “asking for the moon” M/s Northern India Caterers (India)
Ltd. V. Lt. Governor of Delhi”.
50 | P a g e
Testing the present review petitions on the anvil of the aforesaid Regulations /
statutes, the Commission observes that issue of kVAh based tariff, introduction of slabs
in DS tariff, limited telescopic DS tariff, MMC and other issues such as FSA,
accumulated losses, defaulting amount, feeder losses etc. were examined at length by
the Commission while passing the impugned Order dated 7th May, 2015. Hence,
admittedly the first two conditions for review as mentioned above are not met by the
Petitioner and same cannot be re-opened at this stage. Further, it is a settled law that
the plea which was not set up or urged in the main petition for consideration, such a
plea having been made thereafter for the first time in review petition cannot be the
subject matter of consideration. As far as the review petition preferred by the DMRC is
concerned i.e. review sought on the plea of better load factor, better power factor etc.
were also well within the knowledge of the Commission, hence no new facts / figures
has been brought before the Commission that may merit a review.
Additionally, It is evident from the grounds of appeal and the language used
thereto, that the review petition rather than justifying the review sought on the basis of
any new / important matter of evidence or any other sufficient reasons is more in the
nature of assertion that certain facts and figures were not considered or not taken up by
the Commission in the right perspective. Consequently, in the considered view of the
Commission such plea i.e. issues on which the Commission has already deliberated
and passed Order and the same being re-submitted for favour of consideration cannot
also fall under the purview of section 78(2)(c) of HERC (Conduct of Business)
Regulations, 2004.
All most all the objectors raised the issue of non-compliance of the directives
issued by the Commission. The same has been examined by the Commission as
under:-
The Commission observes that various directives issued vide its Order dated
07.5.2015 on the True-up for the FY 2013-14 Annual (Mid Year) Performance Review
for the FY 2014-15, Revised Aggregate Revenue Requirement of UHBVNL & DHBVNL
& Distribution & Retail Supply Tariff for the FY 2015-16 and also the decisions given in
51 | P a g e
the Minutes of Meeting of State Advisory Committee, have not been fully implemented
by the Discoms. This has been viewed seriously by the Commission earlier also. The
observations of the Commission regarding some of the directives are as under:-
1. The directions of the Commission with regard to allowing 4% discount on energy
charges for the consumers who deposit advance payments as well as the rebate
of 25 paisa per unit to the consumers who installs roof top solar plant through
net-metering arrangement should be made a part of the tariff circulars to be
issued by the Discoms.
2. The electricity bills of all NDS/Commercial, LT industry and DS consumers
(having load above 20 kW), should be sent to their e-mail IDs and if such
consumers asks for a hard copy, the same may be supplied at a cost of Rs.10/-
only. SMS should also be sent to such consumers intimating the amount of their
bills and due date. The bills should also be made available on the website of
Discoms. Advertisement on local TV Channels be displayed intimating the
consumers regarding the Website of the Discoms where the consumer shall have
complete details of their billing /complaints etc. These instructions should be
implemented within three month from the date of issue of this Order by issuing
necessary directions to the consumers on their hard copy of the bills being
issued at present.
3. Payment and bills:
It would be mandatory for the consumers of NDS/LT/HT industry and DS above
20 kW to make on-line payments. If this is not possible for all such consumers, then
they should be directed to make payment through RTGS/NEFT OR through
authorized banks. For all other consumers this facility would be optional.
4. Release of pending connections:
The Commission observes that the Discoms have not implemented its directions
regarding filing of on-line applications for release of new connections,
52 | P a g e
extension/reduction of load, change of name, change of category etc. by making the
process simple and hassle free. The Discoms are again directed to comply with the
directions and sub division and category wise status of pendency of consumer
applications be displayed and updated regularly on its web portal.
5. Consumer complaints:
The Commission directed the Utilities to strengthen the complaints handling
mechanism by continuous monitoring and feedback from the consumers. The
Commission again directs that a mechanism may be developed and put in practice
to pay penalty to the affected consumers in case the Discoms fail to adhere to the
Standard of Performances. Compliance report be sent to the Commission.
6. E-tendering.
The Commission observes that its directives to publish NITs with short
description in newspapers to exercise economy have not been implemented. The
Commission further directs that the advertisements should be published in two/three
daily newspapers out of which two should be leading national dailies and should also
be uploaded on the website of the Discoms. If the above instructions are not
followed meticulously, the officer responsible for release of such advertisement shall
be held responsible.
7. Interest on Security Deposit:
The concerned SE/Op will be fully responsible for timely payment of interest on
the consumer’s security deposit & ACD and adjusting the same in the bills/additional
security demand and shall be liable for action under Section 142 of the Electricity
Act, 2003.
8. Details of Electricity Bills issued by the Discoms
The Commission has observed as also pointed out by the consumers in the public
hearing, that the Discoms did not provide the details of the arrears/sundry charges
charged to the consumers in the electricity bills due to which there is huge resentment
53 | P a g e
among the public. The Commission directs the Discoms to provide the details (as
provided in the FOR bill format) of the arrears in the electricity bills of the consumers.
9. Out Sourcing of Services:
Vide its Order dated 29th May,2014 and 7.5.2015 the Commission had expressed
its concern regarding high and ever increasing employees cost of the Utilities and
suggested outsourcing of works wherever possible. It was directed that all non-
technical posts lying vacant for the last three years in the Utilities were required to be
abolished except the posts where the contract/outsource staff have been engaged and
to apprise the Commission. Utilities were directed to provide information to the
Commission within thirty days but only incomplete report has been received till today.
Hence, status of compliance on this issue as per the Orders dated 29th May, 2014 and
07.5.2015 may be provided without any further loss of time. If after 29th May, 2014
anyone has been appointed without the prior approval of the State Government as well
as the Commission, the DDO/officer concerned shall be held responsible for this lapse.
The Commission has also carefully considered the review sought on the issue of
giving retrospective effect to the tariff Order dated 07.05.2015 as well as the arguments
and case laws occupying the field regarding the same. On this issue the Commission
observes that the Hon’ble APTEL in its judgement dated 8th February, 2011 in Appeal
No. 164 of 2010 has dealt with this issue at length. The relevant extract from the said
judgement is reproduced below:-
“22. The question of retrospectivity came up for consideration before The
Supreme Court in the Kannodia Chemicals & Anr. V/s State of UP & Ors.
Reported in (1992) 2 SCC 124. While upholding the retrospectivity of tariff Order
the Hon’ble Court observed as follows,
“A retrospective effect to the revision also seems to be clearly envisaged
by the section. One can easily conceive a weighty reason for saying so.
If the section were interpreted as conferring a power of revision only
prospectively, a consumer affected can easily frustrate the effect of the
provision by initiating proceedings seeking an injunction restraining the
Board and State from revising the rates, on one ground or other, and
54 | P a g e
thus getting the revision deferred indefinitely. Or, again, the revision of
rates, even if effected promptly by the Board and State, may prove
infructuous for one reason or another. Indeed, even in the present case,
the Board and State were fairly prompt in taking steps. Even in January
1984, they warned the appellant that they were proposing to revise the
rates and they did this too as early as in 1985. For reasons for which they
cannot be blamed this proved ineffective. They revised the rates again in
March 1988 and August 1991 and, till today, the validity of their action is
under challenge. In this State of affairs, it would be a very impractical
interpretation of the section to say that the revision of rates can only be
prospective”.
23. This Tribunal in a batch of appeals namely SEIL India, New Delhi V/s PSERC
reported in 2007 (APTEL) 931 considered the question of retrospectivity and
maintained it. In this decision also the tariff Order though made some time after
commencement of the financial year was made effective from 1.4.2005 and this
Tribunal upheld the Order of the Commission. It observed : the cost prudently
incurred is to be recovered, therefore, in the event of a tariff Order being delayed,
it can be made effective from the date tariff Order commences or by
annualisation of the tariff so that deficit is made good for the remaining part of the
year or it can be recovered after truing up exercise by loading it in the tariff of the
next year. Thus law empowers the Commission to specify the date from which
the tariff is to commence or the date when it will expire”.
In view of the above the Commission holds that there was no error or legal
infirmity in the Order dated 7th May, 2015 passed by this Commission which was made
effective retrospectively i.e. 1.04.2015. As per the ibid judgment of the Hon’ble APTEL
the other option available to the Commission was “annualisation of the tariff” i.e.
recovering the ARR approved for the FY 2015-16 over about eleven remaining months
from the date of the impugned Order which would have further increased the per unit
tariff impact on the electricity consumers. Hence, the Commission considered it
appropriate to give retrospective effect to the tariff Order which is in line with the well
settled law as also cited by the Ld. Advocate Shri Varun Pathak on this issue. As far as
the issue raised by the DMRC is concerned i.e. equating DMRC tariff with that of the
Railways (traction supply) the Commission observes that tariff for Railways and DMRC
have been brought at par in the FY 2015-16 for the same voltage of supply as the same
was also proposed by the Discoms in their tariff proposal. Hence, there is no error
55 | P a g e
apparent on the face of record and no new facts / figures have been now placed before
this Commission that may merit review of the tariff determined for the DMRC.
The Commission, however, observes that because of billing of arrears due to
retrospective revision in tariff along with the current bill coupled with levy of fresh FSA
along with FSA arrears, the DS electricity consumers have been put to some financial
hardship. Thus the billing data that has now emerged i.e. after the implementation of the
tariff Order dated 7th May, 2015, shows that the cost of marginal unit consumed in case
of change over from one DS slab to the other is quite high and such dispensation may
actually push the DS consumers to manipulate the meter reading including in
connivance with the field staff of the Discoms. Thus in larger public interest the
Commission, keeping in view the fact that the DS tariff has universal impact on all
electricity consumers of the State and unlike Industrial / commercial category of
consumers the DS Consumers have limited or no ability to fully / partly pass on the
impact of the increase in tariff, has decided to re-visit the same.
In the above context, the Commission has considered the submissions of the
Discoms filed vide affidavit dated 12.10.2015 and observes as under:-
The Discoms have now proposed a running telescopic DS tariff from 0-800 units
per month of consumption. The Commission has considered the same and is of the
view that the Commission, in its tariff Order under review, had deliberately created a
separate slab for the marginal DS consumers’ i.e. 0-50 and 51-100. The highest tariff
charged from this category of consumers was pegged at Rs. 4.50/unit with benefit of the
tariff of Rs. 2.70/unit for the first 50 Units of consumption. Hence, the effective tariff for
such consumers was just about Rs. 3.60 / unit against the combined average CoS of
Rs. 7.16/kWh. Hence, at the effective rate such consumers are paying about 50% of the
CoS which is in line with the National Tariff Policy. The balance, after accounting for the
cross-subsidy available from a few other consumer categories, was met by way of
appropriately aligning the tariff for the DS consumers having a consumption of more
than 100 units per month. At this stage merging this slab, as proposed, with the other
DS slabs will not only disturb the revenue balance in the ARR approved by the
Commission, but will also defeat the purpose of having a separate tariff structure for the
56 | P a g e
marginal DS consumers. Hence, the Commission is not inclined to accept the
submissions of the Discoms on this issue. However, in the extreme genuine cases
subsisting at the margin of the society i.e. the DS consumers whose energy
consumption falls below the MMC threshold and hence are paying on MMC basis, the
Commission observes that MMC was increased from Rs. 100/month to Rs. 120/month
for connected load up to 2 kW, i.e. by 20%, in Order to cushion the ‘tariff shock’ for such
marginal DS consumers the same shall be reduced to Rs. 115/month for load up to
2 kW. Additionally, keeping in view the steep jump in tariff for the DS consumers having
consumption of more than 100 units / month (category II) the Commission, on equity
ground has extended the benefit of lower tariff i.e. Rs. 4.50/unit (who otherwise were not
getting the benefit of telescopic tariff) to the DS consumers having consumption of 0-
150 units per month. The Commission has further examined the proposal of the
Discoms to extend the DS slabs under telescopic mechanism up to 800 units’
consumption / month. The Commission, considering the ‘marginal cost’ impact
arguments of the stakeholders in general and the impact of additional one unit
consumption beyond 0-100 units (1st category) as also beyond 0-500 units extends the
DS slab as it existed prior to the Order dated 7th May, 2015 i.e. Domestic category II
slab shall be extended to consumption of 800 units / month with telescopic benefits.
Further, such a dispensation is being allowed by the Commission on the submissions of
the Discoms that any shortfall in revenue shall be made good through cost reduction
measures including reduction in O&M expenses.
The Commission has deliberated at length the issue regarding kVAh based
billing by the consumers of Panipat as well as the proposal of kVAh billing of consumer
categories i.e. PWW, MITC, Lift Irrigation and Street Light. The Commission observes
that the issue raised by the consumers of Panipat (LT Industry) appears to be a highly
localized issue wherein it appears that such consumers were caught unaware that the
tariff w.e.f 01.04.2015 will be changed from kWh to kVAh and hence in the absence of
capacitors of adequate capacity at their end resulting in low power factor, their electricity
bills got inflated. The Commission has considered the submissions and is of the view,
as also submitted by the Discoms in the hearing that installation of capacitors does not
take much time and the consumers who impose higher cost on the distribution system
57 | P a g e
ought to pay accordingly. Further, the intention of the Commission was also clear in the
tariff Order for the FY 2014-15 wherein the option for kVAh based tariff for LT Industry
Consumers between 20 kW to 50 kW load was given. Hence, at the review stage the
Commission is not inclined to accept the arguments of the LT Industry Consumers from
Panipat. Further, the Commission has examined the proposal of the Discoms for kVAh
billing of consumer categories i.e. PWW, MITC, Lift Irrigation and Street Light and
observes that such dispensation (except in the case of Street Light) was also earlier
urged by the Discoms and the same was considered and rejected by the Commission
while passing the impugned Order. Hence, the same cannot be considered at the
review stage.
The Commission has further considered the submissions of the Discoms
regarding specifying the minimum demand or minimum percentage of contract demand
to be considered for levying fixed charge in case of recorded demand is zero or low in
the case of LT Industry consumers having load more than 20 KW and MDI meters are
installed and hence they end up paying no fixed charges. The Commission, given the
asymmetry between such consumers i.e. one who is fully utilizing his connected load
and pays fixed charges and the one who is under utilizing or not at all utilizing his
sanctioned connected load and hence not paying any fixed charges or nominal fixed
charges, now allows that such consumers shall pay fixed charges on 80% of their
connected load and not on their recorded demand as LT Industrial consumer at present
have no sanctioned contract demand.
The Commission has perused the proposal of the Discoms regarding revision of
levy of FSA in the DS category. As the same is not part of the impugned Order against
which review petitions have been preferred, the Commission shall examine the entire
gamut of FSAs being recovered by the Discoms and pass a separate Order as such
issues cannot be taken up in the present review proceedings. Further, the Discoms
have pointed out a few inadvertent errors in the impugned Order while reproducing the
tariff of NDS category of consumers for the FY 2014-15. The Commission has
considered the same and observes that tariff Order for the FY 2014-15 has been
revoked / amended by the Order dated 7th May, 2015, hence they are of little relevance
58 | P a g e
now. Nonetheless for all intents and purposes the same should be read as per the
Commission’s Order dated 29th May, 2014 which was applicable for the FY 2014-15.
The Commission vide Order dated 07.05.2015 on True- up for the FY 2013-14,
Annual (Mid-Year) Performance Review for the FY 2014-15, revised Aggregate
Revenue Requirement of UHBVNL & DHBVNL & Distribution & Retail Supply Tariff for
the FY 2015-16 approved the tariff for domestic category for the FY 2015-16 as under: -
Domestic Supply Tariff (DS) Category of consumers
Energy Charges (Paisa / kWh or/ kVAh)
Fixed Charge (Rs. per kW per month of the connected load / per kVA of sanctioned contract demand (in case supply is on HT) or as indicated
MMC (Rs. per kW per month of the connected load or part thereof)
Category I: (Total consumption up to 100 units per month)
0 - 50 units per month
270/kWh Nil Rs. 120 up to 2 kW and Rs. 70 above 2 kW 51-100 450/kWh Nil
Category II: (Total consumption more than 100 units/month and up to 500 units/month)
0-250
500/kWh
Nil Rs. 120 up to 2 kW and Rs.70 above 2 kW 251-500 605/kWh Nil
Category III: (Total consumption more than 500 units/month)
Above 500 units 675/kWh (flat rate no telescopic benefits)
Nil Rs. 120 up to 2 kW and Rs.70 above 2 kW
As earlier stated, subsequent to the Order dated 07.05.2015, a large number of
complaints are being received by the Commission regarding excessive billing and
huge arrears levied by the Discoms on account of revision of tariff w.e.f. April 01,
2015. The Commission has decided to revise the tariff for the Domestic category
for the FY 2015-16 considering the submissions of the Petitioner and various other
stakeholders as also the request of Discoms and their assurance that any short fall
in the revenue shall be met by cost reduction including O&M expenses.
The commission has considered revising the tariff for domestic category in public
interest as follows:-
59 | P a g e
Domestic Supply Tariff (DS)
Category of consumers (units per month)
Energy Charges (Paisa / kWh or/ kVAh)
Fixed Charge (Rs. per kW per month of the connected load / per kVA of sanctioned contract demand (in case supply is on HT) or as indicated
MMC (Rs. per kW per month of the connected load or part thereof)
Category I: (Total consumption up to 100 units per month)
0 - 50 270/kWh Nil Rs. 115 up to 2 kW and Rs. 70 above 2 kW 51-100 450/kWh Nil
Category II: (Total consumption more than 100 units/month and up to 800 units/month, telescopic tariff)
0-150 450/kWh Nil Rs. 120 up to 2 kW and Rs.70 above 2 kW 151-250 500/kWh Nil
251-500 605/kWh Nil
501-800 675/kWh Nil
Category III: (Total consumption more than 800 units/month)
801 units and above
675/kWh (flat rate no telescopic benefits)
Nil Rs. 120 up to 2 kW and Rs.70 above 2 kW
The Commission has now revised the tariff for category of consumers having
consumption more than 100 units/ month and up to 800 units/month by giving them the
slab benefit as was available in this tariff Order for the FY 2014-15. The Commission is
of the considered view that a large number of lower middle class consumers fall under
this category and will therefore benefit from the revised DS tariff.
The Commission observes that the Discoms in their submissions have stated
that the MMC in consumption terms works out to only a few days of consumption both
for the DS as well as NDS consumers. Hence, the Commission is unable to appreciate
the reasons behind a large percentage of consumers being billed on MMC basis unless
significant numbers of meters of such consumers are tampered / bypassed / defective
etc. The Discoms must conduct load survey at the earliest as well as check the meters
of such consumers so that their connected loads are regularized and their meters are
accurately recording their consumption. However, to cushion the tariff shock to the
genuine very small DS consumers, subsisting at the margin of the society, the
Commission reduced MMC from Rs. 120/month to Rs.115/month for connected load up
to 2 kW for the marginal DS consumers as given above. The MMC for all other
Domestic category shall, however remain unchanged.
60 | P a g e
Before parting with this Order, the Commission would like to record that in view
of categorical assurance of the Discoms that the impact of these changes in the
Domestic tariff/MMC on the ARR for the FY 20156-16 will be offset through efficiency
gain by way of cost reduction including O&M expenses, the uncovered revenue gap of
Rs. 667.11 crores for the FY 2015-16 as given in the Tariff Order dated 07.05.2015
shall remain unchanged.
This Order is signed, dated and issued by the Haryana Electricity Regulatory
Commission on 15th October, 2015.
Date: 15.10.2015 (M. S. Puri) (Jagjeet Singh) Place: Panchkula Member Chairman
Recommended