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True-up for the year 2003-04 2.1 The Commission had approved the Annual Revenue Requirement and the tariff for the year 2003-04 in its tariff order dated May 23, 2003. These approvals were based on the estimates presented by the Board for various costs to be incurred and revenues likely to be earned by the Board during the year. In its ARR application for the next year, 2004-05, the Board had furnished pre-actuals for the year 2003-04 and also had projected a revenue gap of Rs.68 crores for the year. There were major differences in certain items of costs as well as revenue earned by the Board between the approvals granted by the Commission and the pre-actuals furnished by the Board. The Commission, therefore, in its Tariff Order for the year 2004-05 re-looked at the approvals granted by it earlier and re-determined the approvals granted with reference to the pre-actuals made available by the Board and taking into account other relevant factors. Along with its application for determining the ARR for the year 2005-06, the Board has supplied actual figures for the year 2003-04. The actual figures as per audited balance sheet show variations as compared to the figures earlier adopted by the Commission in its revised order for the year. This chapter contains final true-up for the year 2003-04, on the basis of actual figures but without altering the principles and the norms approved earlier. A. ENERGY DEMAND (SALES), AVAILABILITY AND BALANCE 2.2 ENERGY DEMAND (SALES) 2.2.1 For the year 2003-04, the sales projected by
the Board in the ARR for the year Table 2.1 Energy Sales for 2003-04 (MU)
* See para 2.2.3 ** See para 2.2.2 2.2.2 Metered Sales The Commission notes from Table 2.1 that the total actual metered sales within
the state at 16065 MU are almost the same as accepted by the Commission in its
Tariff Order for the year 2004-05 at 16067 MU. The Commission, therefore,
accepts the actual figures now supplied by the Board for metered sales within
the State. The Board has intimated actual outside state sales at 553 MU.
From the monthly energy availability for the year 2003-04, it is observed that
HP Royalty in Shanan 2.2.3 Agriculture Consumption The Board in its ARR filing for the year 2003-04 projected consumption by
agricultural pumpsets at 6288 MU @ 1858 kwh/kw/year. This was stated to be based
on sample metering study by the Board. The Commission deliberated at length
on the normative consumption by agricultural pumpsets in the tariff orders for
the years 2002-03 and 2003-04 and approved the agriculture consumption for the
year The Board in its ARR for the year 2005-06 has furnished actual consumption by agricultural pumpsets during 2003-04 at 6245 MU as per sample meter readings and the connected load as on 31.3.2004 has now been indicated as 3481578 KW giving the consumption norm of 1794 kwh/kw/year against the norm of 1650 kwh/kw/year approved by the Commission. The Commission sees no reason for accepting agriculture consumption in excess of the approved norm. However, taking note of revised connected load, the Commission approves the revised agriculture consumption for the year 2003-04 at 5745 MU @ 1650 kwh/kw/year on actual connected load of 3481578 KW as on 31.3.2004. 2.3 PSEB?S OWN GENERATION 2.3.1 Thermal Generation The station-wise generation projected by the Board in the ARR for the year 2003-04, generation approved by the Commission in the Tariff Order for the year 2003-04, pre-actuals furnished in the ARR for the year 2004-05 and accepted as such by the Commission in the Tariff Order for the year 2004-05 and actuals furnished in the ARR for the year 2005-06 are given below in Table 2.2. Table - 2.2 Thermal Generation 2003-04 (MU)
The pre-actual generation and auxiliary consumption for the year 2003-04 furnished in the ARR for the year 2004-05 were discussed and accepted by the Commission in its Tariff Order for the year 2004-05 in para 3.4.1 of Chapter-3. The actual gross generation now furnished for GNDTP (2551 MU) and GHTP (3380 MU) is the same as accepted by the Commission in its Tariff Order for the year 2004-05 while actual generation for GGSTP (8313 MU) is higher by 9 MU than the accepted figure. However on verification during a visit to GGSTP it was found that the actual generation is 8304 MU for the year 2003-04 which is the same as accepted by the Commission in its Tariff Order for the year 2004-05. Thus the Commission accepts generation of 8304 MU for GGSTP for the year 2003-04. The gross thermal generation now accepted by the Commission is 14235 MU which is the same as given in the annual statement of accounts for the year 2003-04. The position of auxiliary consumption is given in Table 2.3. Table - 2.3 Auxiliary Consumption 2003-04
It will be seen that the actual auxiliary consumption now furnished for GNDTP (9.54 %), GGSTP (8.33%) and GHTP (8.91%) is the same as accepted by the Commission in its Tariff Order for the year 2004-05. The Commission thus accepts the gross thermal generation at 14235 MU as per actuals and auxiliary consumption for the year 2003-04 as per actuals furnished in the ARR for the year 2005-06. The net thermal generation works out to 12999 MU as shown in Table 2.2. 2.3.2 Hydel Generation The station-wise generation projected in the ARR for the year 2003-2004, generation approved by the Commission in its Tariff Order for the year 2003-04, pre-actuals furnished in the ARR for the year 2004-05 and accepted as such by the Commission in its Tariff Order for the year 2004-05 and actuals furnished in the ARR for the year 2005-06 are given below in Table 2.4. Table - 2.4 Hydel Generation 2003-04 (MU)
Note:- 1. Net of auxiliary consumption (6MU) and royalty and share of HP (101 MU). 2. Net of royalty from Shanan (52 MU), HP share from RSD @ 4.6% (57 MU) and auxiliary consumption (8 MU). 3. Net of auxiliary consumption (11 MU) and royalty/share of HP (122 MU). 4. Net of auxiliary consumption (10MU) and transformation losses (22MU). 5. Net of royalty from Shanan (53 MU), HP share from RSD (69 MU), auxiliary consumption (9 MU) and transformation losses (22 MU). From the annual statement of accounts for the year 2003-04, it is observed that hydel generation during the year is 9305.31 MU against 9318 (4407+4911) MU indicated in the ARR for the year 2005-06 and shown above in column 6 of table 2.4. However, plant-wise generation has not been given in the accounts. The difference being insignificant, the Commission has considered the generation as per ARR. The actual generation furnished in the ARR for the year 2005-06 for different own hydel stations (except ASHP) is equal to the pre-actual figures accepted by the Commission in the Tariff Order for the year 2004-05.The actual generation at ASHP is higher by 13 MU than the pre-actual generation. The Commission, now, accepts the actual hydel generation at 4407 MU gross. For calculating the net generation, the Board has not deducted the HP royalty in Shanan and HP share in RSD but has treated the same as outside state sales as discussed in para 2.2.2. The Commission has worked out net hydel generation by deducting both these as well, from the gross generation. The net hydel generation for the year 2003-04 works out to 4254 MU. Actual net availability from BBMB is higher by 89 MU than the pre-actual accepted by the Commission in the Tariff Order for the year 2004-05. In the ARR for the year 2004-05, the Board stated that increase in hydel generation was on account of good monsoons during 2003-04. The Commission, therefore, accepts the actual hydel generation for the year 2003-04 at 4254 MU net from own hydel stations and 4911 MU net as share from BBMB as shown in Table 2.4. 2.4 POWER PURCHASE To meet the energy demand, the Commission in its Tariff Order for the year
2.5 TRANSMISSION & DISTRIBUTION LOSSES (T&D LOSSES) The Commission in its Tariff Order for the year 2003-04, fixed the T&D losses at 24.50% with consumption by agriculture pumpsets (AP) at 5707 MU @ 1650 kwh/kw/year. In the ARR for the year 2004-05, the Board stated that the T&D losses during the year 2003-04 would be 25.35% with AP consumption at 6243 MU. However, the Commission in its Tariff Order for the year 2004-05 retained the T&D losses for the year 2003-04 at 24.50% with AP consumption as determined by the Commission on actual connected load then intimated. In the ARR for the year 2005-06, the Board has intimated that losses during the year 2003-04 would be 25.35% with AP consumption at 6245 MU. With actual sales, including AP consumption at 5745 MU as now approved, and actual energy availability as discussed earlier in the Chapter, the actual T&D losses work out to 27.00% against target of 24.50% fixed by the Commission as shown in Table 2.5 under Energy Balance. The Commission sees no reason for accepting T&D losses in excess of the approved norm. The Commission, therefore, retains the T&D losses at 24.50% as approved in the Tariff Order for the year 2003-04. The Commission decides that financial burden due to the consequential additional power purchase on this account may not be passed on to the consumers but borne by the Board. The matter has been discussed further in paras 2.6 and 2.9. 2.6 ENERGY BALANCE The details of energy requirement and availability approved by the Commission in Tariff Order for the year 2004-05, actuals furnished in the ARR for the year 2005-06 and now approved by the Commission are given in Table 2.5 below. Energy balance for working out actual T&D losses with actual sales and availability now approved by the Commission is also shown in column 6 of the Table 2.5. Table - 2.5 Energy Balance 2003-04 (MU)
The total energy requirement now approved by the Commission is 29699 MU (net) whereas total energy availability now approved is 30690 MU (net). The difference of 991 MU (net) between energy requirement and energy availability is due to the underachievement of T&D loss target approved by the Commission as discussed in para 2.5 and depicted in columns 5&6 of Table 2.5. The higher T&D loss level than the T&D loss level approved by the Commission has, thus, resulted in increased power purchase to the extent of 991 (8068-7077) MU (net). The matter is discussed further in para 2.9. B. EXPENSES 2.7 FUEL COST The Board in its ARR for the year 2003-04, projected fuel cost of Rs.2119.50 crores for gross generation of 13720 MU for the year 2003-04. The Commission in its Tariff Order for the year 2003-04 approved fuel cost at Rs. 1899.04 crores for a gross generation of 13978 MU. The approved fuel cost is given below in Table 2.6. Table-2.6 Approved Fuel Cost in the Tariff Order for 2003-04
The Board in the ARR for the year 2005-06 has indicated the actual fuel cost
for the year 2003-04 at Rs.2025 crores. As per annual statement of accounts
for the year 2003-04, the total generation expenses for the year 2003-04 are
Rs.2040.72 crores. This comprises of Rs.1959.48 crores towards consumption of
coal and oil, Rs.14.57 crores towards other fuel related costs which include
octroi, contract handling charges, railway staff charges, siding charges etc.
for coal and oil, Rs. 15.52 crores towards other operating expenses which include
cost of water, lubricants, consumable stores and station supplies and Rs.51.15
crores towards fuel related losses which include transit losses, loss on railway
claim for coal etc. Out of these, the expenses of Rs.15.52 crores towards other
operating expenses do not form part of the fuel cost and have been considered
under operation and maintenance expenses in para 2.11. Thus the fuel cost as
per annual statement of accounts is As discussed in para 2.3.1, the actual gross thermal generation of 14235 MU has been accepted by the Commission. The station-wise gross thermal generation approved by the Commission in the Tariff Order for the year 2003-04 and actual gross generation now approved for the year 2003-04 is given below in Table 2.7. Table - 2.7 Gross Thermal Generation for 2003-04 (MU)
While estimating fuel cost for the year 2003-04 in its Tariff Order for the year 2003-04, the Commission had considered the price of coal and calorific value of coal as given below in Table 2.8. Table - 2.8 Price of Coal and Calorific Value of Coal in Tariff Order 2003-04
However, for estimating the cost of fuel for the year 2004-05, the Commission during the course of Tariff Order for the year 2004-05, had verified the actual weighted average price of coal and weighted average calorific value of coal for the year 2003-04 for different thermal stations. These are given in Table 2.9. below: Table - 2.9 Price of Coal and Calorific Value of Coal as verified for 2003-04
For working out fuel cost for the true-up for the year 2003-04, the Commission has decided to consider the above price and calorific value of coal. The fuel cost for the year 2003-04 for different stations corresponding to
actual generation has been worked out based on parameters approved by the Commission
in its Tariff Order for the year 2003-04 and considering average price of coal
and average calorific value of coal for the year 2003-04 as verified by the
Commission during the course of Tariff Order for the year 2004-05 and is given
below in Table -2.10 Fuel Costs (Coal and Oil) for 2003-04
The Commission, thus, accepts the fuel cost at Rs.2019.32 crores for actual generation of 14235 MU for true up for the year 2003-04. It is observed that the fuel cost as per annual statement of accounts (Rs.2025.20 crores) and as now accepted by the Commission (Rs.2019.32 crores) are almost the same. The difference in fuel cost allowed by the Commission with respect to fuel cost as per annual statement of accounts is due to difference in operating parameters approved by the Commission and actuals given by the Board. 2.8 COST OF POWER PURCHASE The source-wise power purchase approved by the Commission in the Tariff Order for the year 2003-04 and actual purchases made as furnished in the ARR for the year 2005-06 with costs are given below in Table 2.11. Table - 2.11 Power Purchase Cost 2003-04
The Commission, in its Tariff Order for the year 2003-04, approved power purchase
cost at Rs.1703.15 crores for purchase of 8826 MU gross. The actual gross power
purchase for the year 2003-04 as furnished in the ARR for the year 2005-06 is
For the year 2003-04, the actual cost for power purchase of 8720 MU gross (8526 MU net) is Rs. 1413.56 crores. The overall power purchase costs are lower than the levels approved by the Commission in Tariff Order for the year 2003-04 by Rs. 289.59 crores. This is inspite of the fact that quantum of power purchases is only marginally less by 106 MU than the level of 8826 MU approved by the Commission. The Board in its ARR for the year 2004-05 had stated that during the year 2003-04, the power purchase expenditure was considerably lower due to judicious purchases by the Board and effective utilization of ABT mechanism. However, the Commission while analyzing the revised ARR for the year 2003-04 in its Tariff Order for the year 2004-05 expressed the opinion that the cost of power purchase including purchase under UI is not entirely within the control of the Board. In view of this, the Commission considers that ordinarily neither penalty nor incentive be imposed on the Board regarding cost of power purchase when such purchase is done judiciously and on merit. The Commission thus accepts the cost of power purchase at Rs.1413.56 crores actually incurred for actual power purchase of 8720 MU gross. 2.9 EXPENSES DISAPPROVED DUE TO HIGHER T&D LOSSES As discussed in para 2.5, the actual T&D losses achieved by the Board
during The Commission, thus, disapproves amount of Rs. 164.37 crores on account of higher T&D losses. The effect of this item is reflected at Sr. No. 11 of Table 2.13. 2.10 EMPLOYEES COST In the ARR for the year 2003-04, the Board had projected the employees cost for the year 2003-04 at Rs.1461.42 crores net after capitalization. These estimates were revised to Rs.1388.89 crores in the ARR for the year 2004-05. Against this, the Commission had approved the employees cost at Rs.1250.13 crores in para 6.2.3 of the Tariff Order for the year 2003-04 which was revised to Rs.1274.66 crores based on actual level of expenditure for the year 2002-03 in para 3.10 of the Tariff Order for the year 2004-05. In the ARR for the year 2005-06, the Board has again revised the employees cost on actual basis to Rs.1385.44 crores net of capitalization of Rs.78.62 crores for the year 2003-04. This amount includes prior period expenses of Rs.6.61 crores. All the prior period expenses are being dealt with separately as such the net employees cost for the year 2003-04 work out to Rs.1378.83 crores. Against this amount, the Commission had approved employees cost of Rs.1274.66 crores for the year 2003-04 in para 3.10 of the Tariff Order for the year 2004-05. The Commission after coming into being in April, 2001 had taken note of the high employees cost and therefore, it had asked the Board to contain its employees cost to a reasonable level. The Commission had allowed these costs for the year 2002-03 to the level of actual expenditure of Rs.1274.66 crores for that year keeping in view the various proposals/schemes for reduction in employees cost promised to be implemented by the Board. The Commission had asked the Board to take earnest effective steps toward reducing the employees cost as this cost was one of the highest in the country. In public hearings, almost all classes of consumers were very critical of the high employees cost and they had raised strong objections against such high cost. The Board, in the ARR for the year 2002-03 had promised to take a number of measures to reduce the employees cost but the proposed measures remained on paper only as no concrete steps were taken in this direction by the Board even though it had admitted that it had excess manpower and its efficiency is impacted by surplus manpower and high employees cost. Despite this, the Board could not restrict excessive employees cost to the level approved by the Commission in the earlier Tariff Orders. The Board in its later submissions before the Commission has stated in clear terms that it cannot bring down the employees cost beyond cost cuttings on account of retirements. The Commission feels that the reduction in the number of employees on account of retirements is a natural attrition in which the Board does not have much contribution. Even here, all retirement vacancies cannot remain unfilled. In any case, the Board was to take effective measures to contain its steadily growing employees cost which is already one of the highest in the country and well above all India norm. Since the Commission had decided to cap the employees cost at Rs.1274.66 crores in its Tariff Order for the year 2004-05, it sees no reason for allowing any further increase in expenditure on this account. As such, the Commission retains the employees cost for the year 2003-04 at Rs.1274.66 crores as already approved. 2.11 OPERATION & MAINTENANCE EXPENSES The Board in its ARR for the year 2003-04 had projected O&M costs at Rs.251.94 crores against which the Commission had approved Rs.236.16 crores in para 6.2.5 of the Tariff Order for the year 2003-04. The Board further revised the expenditure to Rs.189.66 crores in the ARR for the year 2004-05. The Commission had also approved Rs.189.66 crores for the year 2003-04 in para 3.11 of the Tariff Order for the year 2004-05 on the basis of pre-actuals available for the year at that time. In the ARR for the year 2005-06, the Board has demanded operation and maintenance expenses of Rs.199.26 crores inclusive of prior period expenses of Rs. 3.72 crores on actual basis for the year 2003-04. The prior period expenses of Rs.3.72 crores are allowed separately along with other prior period expenses for the year. As per accounts for the year 2003-04, O&M expenses are at Rs.180.02 crores net of capitalization of Rs.1.71 crores. After adding other operating expenses of Rs.15.52 crores pertaining to generation as per schedule-7 of the accounts, the total amount of O&M expenses comes to Rs.195.54 crores which is the same as claimed in the ARR. In view of this, actual O&M expenses of Rs.195.54 crores as claimed by the Board in the present ARR is approved for the year 2003-04. 2.12 ADMINISTRATION AND GENERAL EXPENSES The Board had projected these expenses at Rs.40.10 crores after factoring in savings of Rs.10 crores suo motu in the ARR for the year 2003-04. Against these projections, the Commission had also approved Rs.40.10 crores in para 6.2.4 of the Tariff Order for the year 2003-04. In the ARR for the year 2004-05, the Board had estimated administration and general expenses of Rs.45.71 crores on pre-actual basis for the year 2003-04. The Commission in para 3.12 of the Tariff Order for the year 2004-05 had approved these expenses at Rs.40.10 crores. Now, in the ARR for the year 2005-06, the amount for these expenses has been revised to Rs.45.87 crores on actual basis. This amount includes prior period expenses of Rs.0.24 crores which is being excluded and the same is allowed separately along with other prior period income/expenses. As per accounts for the year 2003-04 also, the administration and general expenses are of Rs.45.63 crores net of capitalization of Rs.12.18 crores. In view of this, the Commission approves the actual administration and general expenses at Rs.45.63 crores for the year 2003-04. 2.13 DEPRECIATION The depreciation charges as claimed by the Board for the year 2003-04 in the ARR for the years 2003-04 and 2004-05 vis-à-vis the amount approved by the Commission is given in Table 2.12 below: Table - 2.12 Depreciation for the year 2003-04 (Rs. in crores)
Now, in the ARR for the year 2005-06, the Board has claimed depreciation of Rs.563.50 crores on actual basis for the year 2003-04. Earlier, the Commission had approved depreciation charges of Rs.549.06 crores for the year 2003-04 on pre-actual basis in para 3.13 of the Tariff Order for the year 2004-05. It was based on the value of gross fixed assets of Rs.12920.61 crores at the beginning of the year as claimed by the Board. From the perusal of the ARR for the year 2005-06, it is noted that the Board has depicted the same value of assets as on April 1, 2003 but the Board has further revised its claim for depreciation charges for the year 2003-04 from Rs.549.06 crores to Rs.563.50 crores on actual basis. The Commission, therefore, approves depreciation charges of Rs.563.50 crores on actual basis for the year 2003-04. 2.14 INTEREST AND FINANCE CHARGES The Board in its ARR for the year 2003-04 had projected net interest and finance charges of Rs.1271.25 crores after capitalization of Rs. 176.20 crores. The Commission had approved these charges at Rs.996.16 crores after disallowing Rs.100 crores on account of diversion of capital funds for revenue purposes in para 6.2.7 of the Tariff Order for the year 2003-04. The Board had revised its claim to Rs.1140.79 crores net after capitalization of Rs.55.21 crores in the ARR for the year 2004-05 against which the Commission had approved Rs.1037.04 crores net of capitalization of Rs.50.55 crores in para 3.14 of the Tariff Order for the year 2004-05. Now, in the ARR for the year 2005-06, the Board has claimed interest charges of Rs.1158.51 crores (gross) after excluding prior period interest of Rs.28.14 crores. The Board has capitalized interest of Rs.56.29 crores and claimed finance charges of Rs.12.81 crores. In the truing up exercise, prior period revenue and expenses are being dealt with separately. As such the prior period interest of Rs.28.14 crores is being added to the gross interest so as to arrive at the actual claim of interest for the year 2003-04 as per ARR. Thus, the claim of interest and finance charges of the Board works out to Rs.1199.46 crores (1158.51 + 28.14 + 12.81) (gross) and Rs.1143.17 crores net of capitalization of Rs.56.29 crores. As per the accounts for the year 2003-04, the interest and finance charges work out to Rs.1192.92 crores inclusive of finance charges of Rs.6.27 crores. The capitalization of interest is the same at Rs.56.29 crores. The Board has made excess claim of Rs.6.54 crores as compared to interest and finance charges as per accounts. It is noted that against the Board?s claim for finance charges of Rs.12.81 crores, the cost of raising loans is Rs.6.27 crores as per accounts. Therefore, the Commission disallows the excess claim of Rs.6.54 crores which represents cost of arranging loans claimed in excess by the Board. Also as per the decisions of the Commission in paras 3.14.4 and 3.14.1 of the Tariff Order for the year 2004-05, an amount of Rs.100 crores is to be disallowed on account of interest on the capital funds diverted for revenue purposes and Rs.2.61 crores being excess interest on working capital loans for the year 2003-04. Thus, disallowance of interest amount of Rs.109.15 crores brings down the claim of the Board to Rs.1034.02 crores from Rs.1143.17 crores net of capitalization of Rs.56.29 crores as per actuals. After carrying out this adjustment, the Commission approves interest and finance charges of Rs.1034.02 crores on actual basis for the year 2003-04. In view of this, the Commission approves Rs.1090.31 crores as gross amount and Rs.1034.02 crores as net amount of interest and finance charges after capitalization of Rs. 56.29 crores for the year 2003-04. 2.15 NET FIXED ASSETS AND RETURN The Board in the ARR for the year 2003-04 had claimed 3% return of Rs.219.79
crores on the capital base of Rs.7326.33 crores. The Commission had approved
return of Rs.222.76 crores based on the capital base of Rs.7425.47 crores in
para 6.2.9 of the Tariff Order for the year 2003-04. Based on revised claim
of the Board, the Commission had approved return of Rs.219.71 crores on pre-actual
basis in para 3.15 of the Tariff Order for the year 2004-05. Now, in the ARR
for the year 2005-06, the Board has revised its claim to Rs.219.92 crores based
on capital base of Rs.7330.65 crores on actual basis. There is no change in
the value of gross fixed assets at Rs.12920.62 crores. Considering the accumulated
depreciation at Rs.4360.24 crores and the consumers? contribution at Rs.1229.73
crores as per accounts for the year 2003-04, the capital base remains the same
at Therefore, the Commission approves Rs.219.92 crores as reasonable return on actual basis for the year 2003-04. C. MISCELLANEOUS REVENUE (NON TARIFF INCOME) The Board had estimated the Miscellaneous Revenue (Non Tariff Income) of Rs.260.41
crores in the ARR for the year 2003-04 against which the Commission had approved
non tariff income of Rs.331.47 crores in para 6.2.8 of the Tariff Order for
the year 2003-04. The Commission, in Section C of Chapter-3 of the Tariff Order
for the year 2004-05, had retained the non tariff income of Rs.331.47 crores
for the year 2003-04 against the pre-actuals of Rs.319.07 crores. In the ARR
for the year 2005-06, the Board has claimed actual non tariff income of Rs.340.20
crores inclusive of prior period income of Rs.23.25 crores. All items of prior
period income/expenditure are being dealt with separately. Therefore, this prior
period income is being excluded from the claim of the Board. As such, the non
tariff income relating to the year As per accounts for the year 2003-04, other income of the Board is Rs.171.53 crores. Besides, there is also non tariff income of Rs.145.42 crores (refer para 2.17 below) which is included in the sale of power as per accounts. Thus, the total non tariff income of the Board as per accounts works out to Rs.316.95 crores which is the same as per claim of the Board as worked out above. As such, the Commission approves non-tariff income of Rs.316.95 crores on actual basis for the year 2003-04. 2.16 SUBSIDY FROM GOVERNMENT OF PUNJAB In para 6.1.2 of the Tariff Order for the year 2003-04, the Commission had determined AP consumption of 5707 MU. The AP consumption was further revised to 5744 MU in para 3.3 of the Tariff Order for the year 2004-05. The Government of Punjab had sanctioned subsidy of Rs.857 crores inclusive of Rs.50 crores as subsidy towards domestic SC consumers for the year 2003-04. Against this, the Government of Punjab had actually paid/adjusted subsidy of Rs.837.69 crores to the Board as per the accounts for the year 2003-04 as already discussed in para 3.14.4 of the Tariff Order for the year 2004-05. Further, in para 7.15.7, the Commission had decided to adjust the balance receivable subsidy of Rs.19.31 crores along with interest of Rs.1.74 crores from the interest payable by the Board on State Government loans for the year 2004-05. Now, in the truing up exercise for the year 2003-04, the Commission has determined
the AP consumption at 5745 MU in para 2.2.3 supra. Therefore, the subsidy payable
by the State Government has been recalibrated at Rs.871.54 crores The Commission, therefore, decides to adjust this balance subsidy of Rs.14.54 crores against the interest payable by the Board to the State Government on State Government loans for the year 2005-06. 2.17 REVENUE FROM SALE OF POWER The Board in its ARR for the year 2003-04 had projected revenue from existing tariff at Rs.6299 crores including Government subsidy of Rs.857 crores against which the Commission had approved revenue of Rs.6552.57 crores in para 6.2.10 of the Tariff Order for the year 2003-04. In the ARR for the year 2004-05, the Board had revised the revenue estimates to Rs.6813 crores including Government subsidy of Rs.857 crores. Based on the revised consumer mix, the Commission had determined the revenue from existing tariff at Rs.6823.13 crores inclusive of Government subsidy of Rs.857 crores in para 3.17 of the Tariff Order for the year 2004-05. As per accounts for the year 2003-04, revenue from sale of power is Rs.6111.55 crores which excludes Government subsidy but includes non tariff income of Rs.145.42 crores on account of meter rent/service rent, recoveries from theft of power, wheeling charges and partly miscellaneous charges viz. Rs.107.77 crores, Rs.18.61 crores, Rs.0.68 crores and Rs.18.36 crores respectively. This amount of Rs.145.42 crores relating to non tariff income has already been taken into account in non tariff income and as such, the same is to be excluded from revenue from sale of power. Thus, after excluding Rs.145.42 crores, the revenue from sale of power is reduced to Rs.5966.13 crores. Besides, the Government subsidy of Rs.871.54 crores as worked out in para 2.16 above is also to be taken into account to arrive at the total revenue for the year 2003-04. Thus, the total revenue from sale of power will work out to Rs.6837.67 crores. Therefore, the Commission approves the revenue from sale of power at Rs.6837.67 crores for the year 2003-04. D. PRIOR PERIOD CREDITS/CHARGES In the ARR, the Board had not asked for true up for the year 2003-04 but in
reply to the deficiency letter it has asked for the true up for the year 2003-04.
Therein, it has stated that the Commission had not taken into consideration
the prior period expenditure which represents the expenses pertaining to the
earlier years but paid / booked during the current year. As such, these expenses
should also be allowed in the ARR for the year in which these are actually paid.
In the subsequent submissions dated April 11, 2005 to the Commission, the Board
has stated that the prior period expenditure of Rs.182.40 crores and other debits
of Rs.6.54 crores for the year As already discussed in the preceding paragraphs, the Board has claimed some of prior period income/expenses under different heads of expenditure which have been excluded while approving income/expenditure under respective heads. As per schedule-18 of the annual accounts for the year 2003-04, the prior period credits are at Rs.23.25 crores and the prior period charges at Rs.205.65 crores. All the prior period items as per accounts are not relatable to specific heads of account. Therefore, the net effect of these items is being taken into account for the purpose of the ARR. The major items under this head are Rs.13.84 crores on credit side relating to sale of power and on the expenses side Rs.181.95 crores and Rs.41.28 crores relating to purchase of power and un-provided depreciation in previous years respectively. Prior period items are normal feature of any business since such items appear/come to notice after the close of the accounts for the year to which these relate. The net effect of these prior period credits/ charges result in increasing the expenses of the Board by an amount of Rs.182.40 crores which the Commission considers appropriate to allow for the year 2003-04. As regards other debits of Rs.6.54 crores the Board was asked to supply the details of the items in brief so as to examine their validity in the Commission. The Board has not given reply in time. As such, this item is not taken into consideration. In its presentation dated April 11, 2005, the Board has also asked for prior period expenditure of Rs.63.54 crores and other debits of Rs.10.31 crores relating to the year 2002-03 to be considered by the Commission in the true up exercise. It is pertinent to mention here that the Board had neither claimed these expenses in the ARR nor in any subsequent submissions before the Commission for the year 2002-03. This claim of the Board at this stage will amount to reviewing the earlier order passed by the Commission in final true up for the year 2002-03 in the Tariff Order for the year 2004-05. In case the Board wants the same or any other such left out expenses/revenue to be considered by the Commission, the Board should file a review petition in this regard. The Commission, therefore, approves prior period expenses of Rs.182.40 crores for the year 2003-04. E. REVENUE REQUIREMENT In view of above analysis the revised revenue requirement for the year 2003-04 would be as per details given in Table 2.13 below: Table - 2.13 Revenue Requirement for the year 2003-04 (Rs. in crores)
Thus, from the true up account for the year 2003-04, it is noted that there is surplus of Rs.36.66 crores against surplus of Rs.262.43 crores earlier determined by the Commission in the Tariff Order dated November 30, 2004. This surplus is being carried forward to next year for adjustment. |
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